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Protego Trust Bank, a chartered crypto bank advised by Brian Brooks, raised $70 million from a host of crypto heavyweights last year and is now in the early stages of another funding round that would value the company at nearly $2 billion.

Investors in the $70 million Series A fundraise — which closed quietly in 2021 — included the investment arms of FTX, Coinbase, Algorand, Avalanche, Cardano, Ripple and Solana, as well as Digital Currency Group, NYCA Partners and Reciprocal Ventures, according to people familiar with the matter.

While the valuation for the Series A round is unclear, The Block’s sources said Protego has already kicked off a Series B round that is expected to value the company at close to $2 billion. The process only began recently and there is no hard timeline in place for closing the round, they added.

A spokesperson for Protego declined to comment to The Block.

Chartering a course

Protego was founded in 2017 by Greg Gilman, who today serves as its executive chair. Gilman is also a co-founder of Science, a startup incubator. Protego made headlines earlier this year when it appointed former US comptroller of the currency Brian Brooks to its board.

Brooks stood down from his regulatory post in January 2021. One month later, Protego was granted a conditional federal charter from the US Office of the Comptroller of the Currency (OCC), paving the way for the conversion of a charter first granted by the Washington State Department of Financial Institutions.

Brooks, who took over as CEO of crypto miner Bitfury in October last year after a short spell as CEO of Binance.US, said in statement issued when he joined Protego that “the complexities and opportunities represented by digital assets” mean that institutional investors need secure and compliant partners to access the sector.

“Protego Trust Bank’s team is disciplined in balancing those requirements with a broad understanding of how distributed ledger technologies will transform the way financial assets are issued, custodied, traded and managed throughout their lifecycle,” he added.   

Amid much talk around the institutional adoption in crypto, startups whose mission is to offer safe access to the sector continue to draw significant sums from investors. Only last week, Elwood Technologies — a crypto-focused market access and trading platform owned by Alan Howard — raised $70 million in a Series A round co-led by Goldman Sachs.

© 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.

India needs crypto rules to resolve regulatory uncertainty, protect investors and boost the sector, CoinSwitch CEO Ashish Singhal said on Sunday, as reported by Reuters.

“Users don’t know what will happen with their holdings – is government going to ban, not ban,” Singhal, who co-founded CoinSwitch, told Reuters at the World Economic Forum in Davos. “Regulations will bring peace … more certainty,” he added.

While India’s central bank has in the past voiced concerns and even supported a ban on cryptocurrencies, a federal government move to tax crypto income has been seen by the industry as a sign of potential acceptance. The Block reported on May 9 that India’s Goods and Services Tax Council was considering a proposal to impose a 28% tax on all cryptocurrency transactions, citing a report by CNBC-TV18.

CoinSwitch, which is valued at $1.9 billion, says it is the largest crypto company in India with more than 18 million users, according to the report.

Blockchain and cryptocurrency companies have a large presence at this year’s Davos meeting, which coincides with a period of crypto prices plummeting globally.

© 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 Twitter account of graphic artist Mike Winkelmann, also known as BEEPLE, was hacked today to promote a crypto scam. His account was hacked to share a fake link ostensibly to a website of a collaboration with fashion designer Louis Vuitton.

Harry.ETH, a security researcher from MetaMask/MyCrypto, tweeted that “Beeple’s Twitter account has been compromised (ATO) to post a phishing website to steal funds.”

It appeared that the victims had lost 35 ETH today, so far, valued at about $71,000.

BEEPLE’s account was hacked to share a fake link to an “official raffle entry,” and Twitter users were warning others not to click on it as some said their wallets had been drained of ETH.

As The Block previously reported, Louis Vuitton commissioned BEEPLE for non-fungible token (NFT) art as rewards for a raffle and game called Louis: The Game.

BEEPLE has about 672,000 Twitter followers, his page says. Last year BEEPLE sold an NFT through an auction for a record $69 million.

© 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.

Tesla and SpaceX CEO Elon Musk tweeted his support for crypto over fiat currencies on May 22, 2021, not today as in a story published earlier.

© 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

• A major South Korean law firm, LKB & Partners, is suing Do Kwon and co-founder Daniel Shin on behalf of five investors.
• Other investors are also organizing online to launch their own lawsuits; we may end up seeing cases centered around whether TFL represented its products and the risks of investing accurately.

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Samuel Bankman-Fried, founder of crypto derivatives exchange FTX,  gave $16 million to super PACs in April, making him one of the top donors to such outside political groups, according to the Federal Election Commission, Bloomberg reported on Saturday.

The crypto billionaire gave $10 million to Protect Our Future, a super PAC that says it supports candidates who can help prevent the next pandemic, the report said.

The group has spent $19 million to influence election primaries so far, all in Democratic House races. Its biggest donation was $10.5 million to support Carrick Flynn in Oregon’s 6th congressional district.

Still, he lost the primary to Andrea Salinas, a state lawmaker who would be Oregon’s first Latino woman elected to Congress should she win in November.

In November 2020, Bankman-Fried made a $5.2 million contribution to the campaign of now Democratic President Joe Biden, The Block reported at the time.

According to Opensecrets.org data, FTX.US was listed among the top donors in the 2020 election cycle in support of Biden’s presidential campaign.

© 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.

European Central Bank President Christine Lagarde said that while crypto assets have no value, she would “guarantee” a digital euro because the ECB would stand behind it, Politico reported today, citing an interview.

“I have said all along the crypto assets are highly speculative, very risky assets,” Lagarde told Dutch television show College Tour in an interview to be aired on Sunday. “My very humble assessment is that it is worth nothing. It is based on nothing, there is no underlying asset to act as an anchor of safety.”

Still, a digital euro would be different, Lagarde said. “The day when we have the central bank digital currency, any digital euro, I will guarantee it.” she said. “So the central bank will be behind it. I think that is vastly different from any of those things.”

Lagarde also said that while she had never invested in crypto, her son had, according to the report.

© 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 Commodity Futures Trading Commission (CFTC) on Thursday charged two US residents with fraud “akin to a Ponzi scheme” in soliciting about $44 million from at least 170 investors through a website and YouTube videos.

Sam Ikkurty of Portland, Oregon, and Ravishankar Avadhnam of Aurora, Illinois, were identified in the CFTC announcement, which added that a restraining order had been issued by a judge freezing assets controlled by the two, preserving records and appointing a temporary receiver.

The complaint alleges that the two solicited money from investors to “purchase, hold and trade digital assets, commodities, derivatives, swaps and commodity futures contracts.” Still, it says, rather than investing the funds as represented, they misappropriated them by distributing money to other participants, “in a manner akin to a Ponzi scheme.”

The defendants then transferred funds to accounts for their own benefit, including millions of dollars to an off-shore entity, the CFTC said. They are charged with operating an illegal commodity pool and failing to register as a commodity pool operator.

© 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.

Do Kwon, CEO of Terraform Labs,  said today on Twitter that contrary to reports, his company has no tax liabilities in South Korea.

Terraform Labs is the core development team working on the Terra blockchain whose native assets, LUNA and UST stablecoin, recently collapsed after a bank run that wiped out billions of dollars of value . 

A recent media report suggested that authorities in Korea were investigating Kwon and Terraform Labs in more than $78 million in unpaid corporate taxes. When questioned on Twitter by FatMan, an anonymous Terra analyst and commentator, about the accuracy of the reports, Kwon responded.

“We have no outstanding tax liabilities in Korea,” he said, adding that the company had already paid its dues in full after it faced a tax audit.

“Happy to engage with any lawsuit or regulatory inquiry to the best of our ability – we have nothing to hide,” Kwon added.

Besides his comment on the company’s taxes status, Kwon said that his precise location has been Singapore since December 2021.

© 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.

Britain’s chief financial regulator cautioned in a speech on Friday against adding crypto markets to his agency’s territory too quickly amid a government plan to make the UK a crypto hub, the Financial Times reported.

The UK’s chancellor, Rishi Sunak, revealed plans in April to regulate stablecoins and issue an NFT as part of a bid to position the UK as a crypto hub, The Block reported at the time.

Still, the head of the Financial Conduct Authority (FCA), Charles Randell, cited a need to be realistic about the amount of preparation needed to supervise “purely speculative crypto tokens,” as well as necessary improvements needed by crypto companies seeking official authorization, the FT said.

Randell went on to stress the importance of his agency’s independence when some in the crypto industry have urged the government to press the regulator to be more accommodating, the FT reported. He also said it was not clear how the FCA would pay for the costs involved in adding digital assets to its responsibilities.

The government’s bid to compete with crypto centers such as Switzerland and Dubai has been met with skepticism by many in the crypto industry, the FT said.

© 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.