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Exchange giant Crypto.com has reportedly pulled out of a sponsorship deal to plaster its name on the Uefa’s Champions League soccer tournament. 

Valued at just over $100 million per year, the contract had been under discussion but never signed, according to a report by Sport Business published on Wednesday.

The Block has contacted Crypto.com for comment but has not heard back before press time. 

The move follows the exchange’s official approval as an official Fifa World Cup sponsor in March, and several other audacious marketing plays in the world of sport.

Last year, the Singapore-based company sponsored the Angel City Football Club, a Los Angeles-based women’s soccer team, as a founding partner. It also became UFC’s official global “fight kit” partner, meaning its logo will be featured in UFC apparel worn by athletes in competitions. And, perhaps most notably, Crypto.com inked a $700 million deal to change the name of the Staples Center in Los Angeles to the Crypto.com Arena.

Understandably, there has been hesitation to fork out big sums in a crypto bear market for expenses such as sports marketing deals. 

“Crypto companies are evaluating the return on their sponsorship packages right now,” Sunny Singh, CEO of media partnerships agency Van Hawke, told The Block. “Fees being paid by crypto have been over and above market rate.”

Singh added that several other sports marketing deals involving crypto that had been in the offing have now been put on hold.

© 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.

Wave Financial, a Securities and Exchange Commission regulated asset manager with over $1 billion in assets, is planning to make its first acquisition in Europe.  

The firm announced its intention to acquire Swiss-based investment firm Criptonite Asset Management in a press release on Thursday.  

Wave has taken a minority stake in the Criptonite, which is the first step of a planned full acquisition, according to the release. The deal is subject to regulatory approval. 

The terms of deal were not disclosed, but Wave expects the acquisition to be completed by the end of 2022. 

The two companies already have a strategic partnership in place. Criptonite launched several Actively Managed Certificates (AMCs) of Wave’s flagship digital asset funds in Europe in 2021. 

“This acquisition is Wave Financial’s first outside the US but will not be our last as we are actively looking for other partners to bring our diverse set of digital asset funds and solutions to accredited investors around the world,” said Matteo Dante Perruccio, president international at Wave, in the release. 

Plotting deals with distressed firms

Securing deals comes naturally to Wave Financial’s CEO David Siemer, who is a former M&A banker and previously founded a boutique investment bank focused on technology M&A. 

“It’s a great moment for Wave, we’re in a great financial position, we have a really strong balance sheet, we’re making offers on a number of these [companies] to acquire in kind of a roll up strategy,” said Siemer in an interview with The Block. 

Siemer is exploring deals with other asset managers as well as distressed exchanges and lenders that are struggling in the bear market. 

“I think we’re probably closing in on like a 100 at least initial calls with different companies out there over the last month and a half since these things all started floating,” Siemer said. “We have offers out right now on a couple companies, some pretty large ones that are on pretty steep fire sales,” he added. 

Wave had exposure to the now-imploded Terra ecosystem within its portfolios. The collapse of Terra and its algorithmic stablecoin UST in May wiped out an estimated $40 billion in market value. Despite the exposure, Wave managed to get out of the positions with little damage, Siemer said, leaving it in a strong position to hunt for cheap deals. 

Mergers and acquisitions are on pace for a record year, according to a report from The Block Research.  

However, several high-profile deals have fallen apart in recent weeks, such as investment firm Galaxy Digital’s acquisition of crypto custodian BitGo and crypto miner Prime Blockchain’s merger with SPAC 10X Capital Venture Acquisition Corp II. 

Blockchain M&A transactions and dollar volume by year

© 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.

OpenSea, the largest non-fungible tokens (NFTs) marketplace, plans to exclusively support NFTs based on the proof-of-stake version of the Ethereum blockchain once The Merge is complete.

“First, and most importantly, we are committed to solely supporting NFTs on the upgraded PoS [proof-of-stake] chain,” OpenSea said, in a series of tweets published late August 31.

To date, some $31 billion in Ethereum-linked NFTs have been traded on the platform, according to The Block data. The entirety of that sum — which dwarfs trading volumes for NFTs linked to other blockchains — is made up by trading in NFTs that are underpinned by the current, proof-of-work (PoW) version of Ethereum.

The Merge — the final stage in Ethereum’s transition from proof-of-work to proof-of-stake — will this month see the so-called Beacon Chain and its validators become the foundation of the blockchain network. A wide variety of crypto outfits will be affected and have been busy preparing for the switch.

OpenSea said in a tweet that it has been preparing to deliver “a smooth transition,” but acknowledged that the novel situation will require “monitoring, managing, and communicating throughout.”

Crypto exchange giant Coinbase said recently that it is open to listing tokens associated with an Ethereum proof-of-work fork after the blockchain’s Merge to a less energy-intensive system. The planned fork, known as ETHPoW, aims to split away from the Ethereum main network and continue mining operations.

In the tweets, OpenSea said: “While we won’t speculate on potential forks — to the extent forked NFTs on ETHPoW exist — they won’t be supported or reflected on OpenSea.”

© 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.

Law firm Brown Rudnick has nabbed five prominent crypto lawyers from Anderson Kill for its Digital Commerce practice.

Stephen Palley, Matthew Richardson, Preston Byrne and Hailey Lennon will join the firm as partners, and Jeffrey Karas also will join as an associate. The group first worked together at Anderson Kill’s Technology, Media and Distributed Systems group, which Palley founded and chaired. At Brown Rudnick, Palley will serve as co-chair of the Digital Commerce group. 

Palley, Richardson and Byrne will be based in Washington, D.C., while Lennon will be based in Orange County, California. 

“Our clients are increasingly in the digital asset space as founders, investors, or traditional corporate entities looking to use technologies such as blockchain and cryptocurrencies as part of their business. This team of supremely talented lawyers brings the type of insights and skills that will benefit our clients by enhancing our ability to offer an end-to-end experience, particularly for those in the technology space,” said Vince Guglielmotti, CEO and chairman of Brown Rudnick, in a statement.

The move is part of an intention to expand the Digital Commerce practice, according to the firm. Indeed, the group has a breadth of experience among them. Palley, Byrne and Lennon have garnered considerable followings on crypto Twitter for thought leadership on the intersection of crypto and the law.

Palley has served as outside general counsel to a variety of crypto firms, particularly in building legally compliant software solutions. He focuses his practice on litigation and insurance recovery among other areas of the law.

Byrne has his roots in the crypto community, having served as a co-founder of an early enterprise blockchain startup and a developer in his own right. He advises a variety of firms on cross-border issues, working with miners, stakers, wallet providers and custodians, among other technology firms.

Lennon is regulatory focused, cutting her teeth in regulatory positions at firms like Coinbase, bitFlyer and Silvergate. She also handles crypto enforcement actions in addition to helping clients navigate licensure and compliance frameworks.

Richardson is focused on cyber law, including data protection and intellectual property among other aspects. He published a book on cyber crime at a time when the topic was early to the legal world. He’s also a practicing barrister in the U.K. 

“My colleagues and I were drawn to Brown Rudnick because many of its practice and industry groups, particularly technology, complement our own,” Palley said in the announcement. “We look forward to working with our new colleagues to offer our clients access to a broad footprint of capabilities in the technology industry. The firm’s deep corporate, regulatory and technology practices, as well as its footprint in the United Kingdom, will be excellent resources for existing and future clients.” 

© 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.

Most bitcoin mining stocks went up on Wednesday as the coin rose above the $200,00 mark.

Bitcoin was priced at around $20,200 at market close, according to data from TradingView.

The network’s mining difficulty jumped by 9.26% in the largest increase since January, according to an update on Wednesday. 

The growth in hash rate is due to “a combination of heat waves finally subsiding (on a global level) and facilities slowly coming online,” said Kevin Zhang, senior vice president of mining strategy at Foundry, which runs the Foundry USA mining pool. “There’s also the added kicker of the higher efficiency Bitmain S19 XP’s finally hitting the market as well!”

Argo’s stock rose by 16.67% on the London Stock Exchange, followed by Hive (+4.52% on the Toronto Stock Exchange), Riot (+4.06%) and Bitfarms (3.57% on the Toronto Stock Exchange).

Here’s how crypto mining companies performed on Wednesday, August 31:

© 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.

Michael Saylor and the company he founded, MicroStrategy, face legal action in Washington, D.C. over tax fraud. 

On August 31, Attorney General Karl Racine tweeted that D.C. is suing the tech executive:

NEW: Today, we’re suing Michael Saylor – a billionaire tech executive who has lived in the District for more than a decade but has never paid any DC income taxes – for tax fraud.

— AG Karl A. Racine (@AGKarlRacine) August 31, 2022

District authorities accuse Saylor of evading over $25 million in D.C. taxes by misrepresenting his place of residence as either Florida or Virginia instead of the U.S. capital, due to the lower tax rates in those states compared to the District. MicroStrategy is based in Tysons Corner, Va. 

“Defendant Saylor knowingly avoided income taxes he owed to the District by fraudulently claiming to be a resident of other, lower-tax jurisdictions while maintaining his domicile and place of abode in the District, including living in a luxury penthouse the Georgetown waterfront and docking multiple yachts on the District’s Potomac riverfront from 2005 to present,” the complaint filed Aug. 22 but made public on Aug. 31 by Racine alleges. The filing cites social media posts by Saylor in Washington as part of its supporting evidence.

Racine’s office also names MicroStrategy as a co-defendant, claiming that the company helped conceal Saylor’s place of residence for tax purposes, and that MicroStrategy’s chief financial officer documented the number of days Saylor spent either in Florida or D.C. 

“Sometime thereafter in 2014, the MicroStrategy CFO, brought the issue of Saylor’s fraudulent evasion of District taxes to Saylor as a potential source of liability for the company,” the complaint reads.  

In a Wednesday press release, Racine’s office characterized the complaint as, “the first suit brought under the authority of the District’s recently passed False Claims Act that encourages whistleblowers to report instances where DC residents evade the District’s tax laws by misrepresenting their residence.” 

The suit asks the court to award the District Saylor’s unpaid tax liability as well as “treble damages and civil penalties.” 

Saylor stepped down from his position as CEO of MicroStrategy at the beginning of August following underwhelming returns on the company’s major bet on Bitcoin. Saylor said he would move to an executive chairman position,  “to focus more on our bitcoin acquisition strategy and related bitcoin advocacy initiatives.” 

MicroStrategy did not immediately respond to a request for comment.  

© 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.

South Korean authorities arrested 16 people linked to illicit foreign exchange transactions as financial crimes using cryptocurrencies soar, local media report.

About 75% of violations of the country’s Foreign Exchange Transactions Act so far this year have involved cryptocurrency. Seoul Daily News reported that many of the crimes were linked to “hwanchigi,” the practice of illegally transacting funds between South Korea and overseas.  

The practice of hwanchigi has been linked to the “kimchi premium,” the gap in cryptocurrency prices on Korean exchanges versus exchanges globally which usually affects bitcoin. Seoul Daily News cited this trading practice in its report on Tuesday. 

Two people are facing prosecution and seven face fines, while the remaining seven are being investigated further, Newsis and the Seoul Daily News report. One of the people facing prosecution, referred to as “Mr. A,” is suspected of establishing several ghost companies in order to send funds abroad. In reality, Mr. A was importing cryptocurrency from abroad and reselling it on the South Korean market at a higher price – due to the kimchi premium, discussed here.  

The second suspect, “Mr. B,” received 400 billion won ($298.2 billion) from 70 people wishing to purchase cryptocurrency. Mr. B would then send the money back overseas as import trade proceed, through his own company.  

Both prosecutions stem from investigations that have been underway since February, carried out by Seoul customs authorities.

At present, the price of bitcoin on South Korean exchange Upbit is $20,263, considerably higher than Coinbase, on which it is $20,032, according to data.

© 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.

Socios has extended a deal to develop an $ARG fan token for the Argentine Football Association through at least 2026.

The two will also build a gamified, web3-ready, engagement and rewards community for Argentine fans through the tokens, which will be built on the Chiliz blockchain.

Socios leverages blockchain technology to provide fan tokens, collectibles and other digital assets to sports organizations. Last year, it partnered with the management firm behind the New England Patriots and the National Hockey League’s New Jersey Devils. It had partnerships with 24 National Basketball Association franchises as well.

Socios is tapping into a soccer-wild country. In a survey of Argentines, Statista found that 85% of them are interested in the sport. Perhaps more noteworthy is the popularity digital assets are seeing. With annual inflation at 64% in August, with some forecasts sending it to 90% by year’s end, locals swap their pesos as quickly as possible, be it for U.S. dollars, bitcoin or anything that’s simply not a peso. According to a Morning Consult survey earlier this year, nearly 60% of Argentine respondents said they’d bought or sold cryptocurrency in the last month. 

© 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.

Kyle Roche has filed to withdraw as counsel from several class action lawsuits against digital asset-related businesses.   

The withdrawals come after videos circulated showing the attorney discussing his relationship with other companies in the space.  

Roche is a founding partner of law firm Roche Freedman and known for bringing high-profile class action suits against crypto firms and projects. Notices of withdrawal by Roche as counsel appeared on the dockets today in multiple cases led by Roche, including class action suits brought against Tether and Bitfinex, Tron, BitMex and Binance.   

The notices indicate that Roche has left the firm’s class action practice, though the firm may continue to pursue those class action suits. As of publication time, no notice has appeared in the firm’s class actions against Binance.US, DeFi firm Celsius, Dfinity or Solana. 

The motions to withdraw come in the wake of a blog post by the anonymous site Crypto Leaks, which included a video of Roche appearing to discuss his relationship with the leadership of Ava Labs, and different lawsuits he helped lead. . 

In a statement published Monday, Ava Labs Founder and CEO Emin Gün Sirer called Roche’s statements in the video, “false claims,” and denied having a relationship with the lawyer beyond his representation of the company in contract disputes and a personal libel case involve Sirer.   

Roche has also denied the Crypto Leaks post. In self-published statement, he alleged that the video was taken out of context and “illegally obtained.” He did not provide a comment for the record on his case withdrawal filings.

© 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

• Founded in 2017 by Kyle Samani and Tushar Jain, Multicoin Capital is a thesis-driven investment firm that invests exclusively in digital assets and blockchain companies
• Multicoin Capital is an active investor across DeFi, Web3, and Layer-1 technologies
• In total, the firm’s portfolio consists of at least 108 startups and protocols across 11 verticals. This is the third iteration of Multicoin Capital’s portfolio map and an update to our previous coverage.

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