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Protego Trust Bank, a federally chartered crypto bank, has appointed five Wall Street veterans to its advisory board as it gears up for a full launch later this year.

The company already counts former US comptroller of the currency Brian Brooks among a 12-person board of directors. This morning’s announcement sees Protego’s separate advisory board grow to 11 people.

Joining the advisory panel are former State Street Corporation chairman and CEO Jay Hooley; Kelly Mathieson, who during a 26 year stint at JPMorgan served as global head of custody product and global head of securities clearing and collateral management; Cris Conde, co-founder of Devon Systems and a senior advisor at Accel Partners; Sultan Meghji, former chief innovation officer at the Federal Deposit Insurance Corporation; and Brian Shea, former vice chairman and CEO of investment services at BNY Mellon.

In a statement, Protego’s founder Greg Gilman said the firm is “focused on leveraging a deep understanding of traditional banking with the opportunities to responsibly build the next generation of finance.”

“Each advisory board member brings insights and expertise that span the technology and financial services spectrums, translating to enhanced offerings for institutional clients,” he added.  

Fundraising efforts

Founded in 2017, Protego was granted a conditional federal charter from the US Office of the Comptroller of the Currency (OCC) in February 2021, paving the way for the conversion of a charter first granted by the Washington State Department of Financial Institutions.

In May, The Block reported that Protego had quietly raised $70 million in a Series A round last year, and that it is currently seeking further investment that could value the company at $2 billion.

© 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.

Play-to-earn giant Merit Circle (MC) will pay out $1,750,000 to Yield Guild Games (YGG) as a settlement, after the company’s decentralized autonomous organization (DAO) voted to remove YGG as an investor.

Arguably competitors in the space, both Merit Circle (MC) and YGG are play-to-earn-focused DAOs that provide scholarship opportunities for players, as well as making investments in online play-to-earn games.

The payout, which will protect both sides from future litigation, is ten times Philippines-based YGG’s initial investment, according to a joint statement released on Tuesday. The refund includes an investment from YGG founder Gabby Dizon’s personal fund, Nifty — which the DAO had initially voted to return, alongside cancelling YGG’s s0-called Simple Agreement for Future Tokens (SAFT).

MC and YGG described the deal as “a solution that still satisfies the will of the Merit Circle community, but was also acceptable to YGG.”

YGG was one of several investors in the fledgling DAO in September last year. However, it became the center of debate at the MC DAO after it was criticized by a member named HoneyBarrel for failing to prove its value to the community beyond financial support.

Both YGG and MC disputed this characterization and claimed that YGG had provided support, including introductions to other investors.

The case has attracted attention as a landmark test for the absolute power of DAO decision making. Both within and without the DAO, concerns were raised about the precedent the decision could set and the legal and reputational implications of removing an investor.

As a result, Merit Circle has hinted that changes in governance could be on the way.

“We have a lot of governance improvements in mind that should avoid explosive situations like this in the future and will mitigate the potential doubts parties could have around agreements with DAOs. Of course, we will also rely on input from the community and from external stakeholders to come to the best models,” it said 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.

Tron’s Decentralized USD (USDD), an algorithmic stablecoin inspired by TerraUSD, entered its third day trading below $1 on Wednesday. 

The token dipped as low as $0.959 this morning before recovering to $0.974 at the time of writing, according to CoinGecko data.

USDD shares the same algorithmic model of mint and burn as the now-collapsed TerraUSD (UST). Whenever the price of USDD is below a dollar, the system allows you to burn one USDD to mint $1 worth of tron, USDD’s sister token on the Tron blockchain.

USDD first lost its dollar peg on Monday amid a broader crypto market slump. It traded around the $0.98 mark yesterday before another dip this morning. Amid the USDD de-peg, the price of tron (TRX) got slashed by roughly 16% today, and is changing hands at $0.05. 

With USDD losing its dollar value, there may be intense pressure on tron. This is similar to how UST’s de-peg led to an implosion last month of its sister token called luna.

Meanwhile, the Tron DAO Reserve, a body that exists to defend USDD’s peg, has been acquiring assets to back up the stablecoin’s value. It has bought more than 1 billion USDC in recent days and holds an additional $500 million worth of assets like USDT, bitcoin and tron. So far, however, the team’s accumulation of capital reserves has not restored confidence in USDD’s value.

Therefore, in order to prepare for the worst outcome, Tron DAO announced today it would pull out 2.5 billion TRX (worth some $125 million) from the Binance exchange. Taking its token off exchanges will allow the team to prevent traders from taking large short positions on the asset. This also ensures Tron DAO can maintain a large reserve of TRX tokens, adequate enough to redeem USDD holders. 

© 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.

Kraken CEO Jesse Powell has hit out at a small group of employees employed at the cryptocurrency exchange for their lack of cultural fit with the company.

In an 11-post Twitter thread on Wednesday, Powell cited 20 people out of its 3,200 employees as being a “bad fit” for the company and noted that some had even spoken to journalists regarding the company’s internal culture. 

“When things were rosy, everybody got along,” he said. “When things started to look grim, sensitivities and the misalignment came through. People focused on minor slights, first world problems rather than our really big, important Mission to help billions of people.” 

These problems according to Powell included the use of the N-word, the use of pronouns or lack thereof, and debates on whether differences in human sex exist. In particular, he derided the focus on these issues instead of concentrating on building out the company’s products.

These internal debates in the company resulted in it issuing a statement emphasizing a “crypto-first culture”. According to the Twitter post, employees were given the choice of committing to the company — whether they agreed or disagreed with the document — or leaving with severance pay.

The news comes as companies across the cryptocurrency space continue to slash employee numbers as the digital asset market wobbles. 

Yesterday, rival exchange Coinbase cut its workforce by about 18% to weather the downturn and more than 1,500 people have been laid off by crypto firms in the past two months. Previously, companies such as Robinhood, Crypto.com and Klarna announced that they were downsizing. 

Unlike other players in the exchange space, Kraken says it does not intend to make any layoffs and still has over 500 roles to fill. 

© 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.

This is a breaking news item and will be updated. 

© 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.

Stablecoin provider Tether hit out at “rumors” about its holdings of commercial paper, a form of short-term corporate debt, while distancing itself from troubled lender Celsius and crypto hedge fund Three Arrows Capital. 

The tether stablcoin, often known by its ticker USDT, is the biggest in the crypto market. Tether maintains the value of its centralized stablecoin against the US dollar by using a basket of assets, including corporate debt, US Treasury bills and some cash reserves.

In a blog post on Wednesday, the company wrote that rumors had been circulating that its commercial paper portfolio is “85% backed by Chinese or Asian commercial papers and being traded at a 30% discount.”

It called these allegations “completely false,” adding that they are likely to induce “further panic” to generate profits. It referred to its transparency disclosures for further information and said its current portfolio of commercial paper has since been further reduced to $11 billion (from $20 billion at the end of March) and will be $8.4 billion by the end of June.

In May, Tether reported that it had reduced its commercial paper to $19.9 billion from $24.2 billion the previous quarter, a 17% decrease. It also added US Treasury bills, increasing them to $39.2 billion from $34.5 billion. 

Bloomberg said last October said that much of Tether’s commercial paper had been issued by big Chinese companies, causing some analysts to question the quality of the reserves. Tether has refrained from disclosing the names of those firms.

The ubiquitous stablecoin provider also denied on Wednesday that it has lending exposure to Three Arrows Capital, which is currently struggling to avoid potential insolvency after being liquidated by its lenders, as per earlier reports by The Block.

Tether added that its Celsius position has been liquidated with no losses, and that its position in regard to the crypto lender has always been over-collatoralized. 

© 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.

NFTPort, a crypto startup that provides non-fungible token (NFT) infrastructure for developers, has raised $26 million in a Series A funding round.

Taavet+Sten — the investment vehicle of Taavet Hinrikus (Wise co-founder) and Sten Tamkivi (Teleport co-founder) — and Atomico, the European venture capital firm, co-led the round. 

As part of the deal, Tamkivi has also joined NFTPort as a co-founder. Rain Johanson, former CTO of Estonian mobility company Bolt, has also joined NFTPort as a co-founder and CTO. 

Tamkivi and Johanson join NFTPort’s existing co-founders Johannes Tammekand and Kaspar Peterson.

What is NFTPort?

Based in Estonia, NFTPort helps developers quickly build NFT-based applications through its infrastructure.

“Our infrastructure enables developers and companies to bring to market their NFT applications in hours or days, instead of months and thus save hundreds of thousands of dollars,” said Tammekand.

Specifically, NFTPort provides three key products: data APIs, minting APIs and user safety APIs. Data APIs enable developers to access NFT data from the Ethereum, Polygon and Solana blockchains “in a day.”

Minting APIs, on the other hand, allow developers to deploy and manage NFT smart contracts without writing any code. And user safety APIs act as a “counterfeit detection engine” to cross-check if a given NFT has been previously minted on any of NFTPort’s supported chains, thus increasing user safety. 

NFTPort says its infrastructure is used by over 30,000 developer teams, including Nifty Gateway, the Gemini-owned NFT marketplace, and Protocol Labs, the company behind Filecoin and other projects.

Protocol Labs is one of NFTPort’s participating investors in the Series A round. Other backers in the round include IDEO CoLab Ventures, Polygon co-founder Jaynti Kanani, Polkadot co-founder Jutta Steiner, Checkout.com CTO Ott Kaukver and former Coinbase CTO Balaji Srinivasan, who co-founded Teleport with Tamkivi.

Expansion plans 

With fresh capital in hand, NFTPort plans to scale its infrastructure and support more blockchains. The firm also plans to build a decentralized NFT infrastructure protocol in the future, said Tammekand.

To that end, NFTPort is also looking to expand its current team of 18 people to more than 50 people in the next 12 months, Tammekand said. The firm will hire across engineering, product and marketing functions.

The Series A round is NFTPort’s first fundraise and was closed in March, said Tammekand. He added that it was an equity round and declined to comment on the firm’s valuation.

© 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 future of crypto hedge fund Three Arrows Capital hangs in the balance as the firm faces potential insolvency after being liquidated by its lenders.

According to well-placed sources, the investment firm — which counts the likes of options exchange Deribit and financial services firm BlockFi among its venture bets — is in the process of figuring out how it can make itself whole with lenders and other counter-parties after it was liquidated by top tier lending firms in the space. 

Sources declined to share the names of those firms on the record for fear of reprisal, but three people said the liquidation totaled $400 million among lending firms. They added that the firm has maintained limited contact with its counter-parties since being liquidated. 

The liquidation event is just one of several setbacks by the firm, which has backed projects like Avalanche, Polkadot, and Ether which are all down 57%, 38.8%, and 47% over the last 30 days respectively. 

The fund sustained significant losses during the collapse of the Terra ecosystem last month, after investing heavily in its native token LUNA. 

The firm, which reportedly managed approximately $10 billion at market peak by some estimates, is led by former classmates Su Zhu and Kyle Davies. 

Zhu, co-founder and CEO of Three Arrows Capital, addressed rumors regarding the crypto investment firm’s operations and solvency in a tweet Tuesday evening. 

“We are in the process of communicating with relevant parties and fully committed to working this out,” he said. 

Representatives from Three Arrows did not respond to messages seeking comment. 

Zhu — who up until a few weeks ago was a vocal crypto bull — recently took to Twitter to admit that his ‘supercycle’ bull case on the crypto market was “regrettably wrong.”

“Supercycle price thesis was regrettably wrong, but crypto will still thrive and change the world every day,” he said at the end of May.

The supercycle was an idea pushed by Zhu that suggested the crypto market would gradually rise during this market cycle, avoiding a sustained bear market.

In an interview on the UpOnly podcast in February 2021, Zhu suggested that bitcoin’s price could go as high as $2.5 million per coin if bitcoin were to capture the same market value as gold.

© 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.

Zhu Su, co-founder and CEO of Three Arrows Capital, appears to have addressed rumors regarding the crypto investment firm’s operations and solvency.

“We are in the process of communicating with relevant parties and fully committed to working this out,” he said, in a tweet published late on June 14.

The tweet comes amid rampant speculation on social media among crypto market participants that Three Arrows is has been negatively impacted by recent crypto market conditions to the point that it is now facing insolvency. 

The fund sustained significant losses during the collapse of the Terra ecosystem last month, after investing heavily in its native token LUNA, and is now facing further market turbulence after crypto lender Celsius paused withdrawals on Monday.  

Further details on Three Arrows’ financial position have not yet come to light. The company was contacted by The Block for comment but did not respond by press time.

© 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 lender Celsius has hired lawyers from Akin Gump Strauss Hauer & Feld LLP as it mulls its financial options after halting withdrawals this past weekend, according to the Wall Street Journal.

Restructuring lawyers have been tapped from the law firm as it mulls what to do after freezing withdrawals, account transfers and swaps. Celsius cited “extreme market conditions” in its announcement at the time.

The Wall Street Journal report said that Celsius “is first looking for possible financing options from investors but is also exploring other strategic alternatives, including a financial restructuring,” according to a source with knowledge of the process.

Earlier Tuesday, Celsius said in a post on Twitter that it “is working as quickly as possible and will share information as and when it becomes appropriate. Acting in the interest of our community remains our top priority.”

© 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.