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The Luna Foundation Guard (LFG), a Singapore-based non-profit that supports the Terra blockchain ecosystem, is looking to raise more than $1 billion to shore up the UST algorithmic stablecoin after it lost parity with the US dollar, according to three sources familiar with the situation. 

Algorithmic stablecoins like UST are meant to stay pegged one-to-one to the price of an underlying fiat currency such as the dollar. But UST dropped as low as $0.61 on Monday amid a wider sell-off in crypto markets, before recovering to $0.91 at the time of writing.

The group is now looking to raise fresh capital from some of the industry’s largest investment firms and market makers, according to the sources. The deal, currently being negotiated, offers investors the opportunity to purchase LUNA tokens at a 50% discount, although those tokens would be subject to a two-year vesting schedule.

LFG didn’t respond to The Block’s request for comment. 

The funding effort, which could help the project defend UST’s peg to the dollar moving forward, is the latest attempt by LFG to instill a fresh degree of confidence in the market. On Monday, LFG announced it had lent $1.5 billion worth of bitcoin and UST to third-party trading firms. LFG had originally sought out to purchase as much as $10 billion in bitcoin to support the stablecoin’s peg.

UST attempts to keep parity with the dollar through its relationship with the LUNA token. A burning mechanism and the ability to always be able to sell $1 worth of LUNA for 1 UST are designed to keep it in check.

Yet critics say the success of this operation depends on the strength of LUNA’s price and on its key DeFi platform, Anchor, continuing to produce an up to 20% yield to incentivize liquidity.

Anchor has seen its total deposits drop precipitously from a peak of $14 billion to below $10 billion. 

Arbitrageurs are meant to step in during these moments of price dislocations, converting $100 in Terra’s native token LUNA into $100 of UST and pocketing the price discrepancy between the two.

Over the past two days, however, large amounts of withdrawals of UST across decentralized finance protocols have put immense pressure on the system.

Both UST and the wider Terra ecosystem are supported by LFG. The non-profit’s governing council includes Terraform Labs co-founder Do Kwon, Terraform Labs head of research Nicholas Platias and Jump Crypto president Kanav Kariya, among others.

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© 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.

Visa’s global head of fintech and crypto, Terry Angelos, is leaving the financial services company to take over as CEO of mobile trading tech company DriveWealth, according to CNBC.

DriveWealth was founded in 2012 and is based in Jersey City. Angelos will take on the role starting next week.

“If you were to think about the single, most reliable long-term asset that people around the world want to own, it’s equity in U.S. companies,” Angelos told CNBC. “Traditionally, people outside the U.S. don’t have the ability to open up a brokerage account. That’s something that we think we can help solve.”

DriveWealth, while focusing on stocks, also offers crypto investing.

Angelos spent seven years at Visa, starting as VP of Visa Commerce in 2015, according to his LinkedIn.  Prior to that, he was the founder and CEO at TrialPay, which was acquired by Visa in 2015.

DriveWealth last raised a Series D in 2021, and was valued at $2.8 billion, with backing from Softbank, Fidelity’s venture arm, Citi Ventures, and others.  While an IPO is not out of the question, said Angelos, he’s focusing more on increasing DriveWealth’s footprint in the near term.

Two months ago, Daniel Mottice, who was at Visa for five and a half years as product lead of crypto, left the company to launch his own Web3 venture.

© 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.

Haun Ventures has led an $11 million seed funding round for Highlight, an NFT platform focused on community building tools. 

Other investors in the round include 1kx, A_Capital, SciFi VC, Floodgate, Coinbase Ventures, 35 Ventures, Polygon Studios, Mischief VC, DAOJones, Offline Ventures, Gokul Rajaram, Lenny Rachitsky, WME, Method Management, ThreeSixZero, Tom Windish, and many others.

The idea behind Highlight is to offer minting tools to creators who don’t possess a coding or crypto background. On Highlight, creators make money by selling NFTs granting access to a community of rewards and collectibles. The company’s founders are also taking aim at a state of affairs in which content creators on social media sites earn little to none of the money their work generates.

Highlight charges no gas fees and charges a 3% fee on all tokens sold. Fans can buy NFTs using just an email address and a credit card. NFTs minted on Highlight, which is built on Polygon, can be supported by OpenSea, Rarible, and other NFT marketplaces that support Polygon. 

“This really sets us up to launch our product and to get out there and to start getting these tools in the hands of artists and creators that we’ve built them for,” said Nat Emodi, founder of Highlight, in an interview with The Block. “We’re a very technical team, so our background is from Square, Instagram, Amazon, and elsewhere. Our primary use of the funding is to build out the product design and engineering teams.”

The funding round comes as social media companies like Meta openly rethink this relationship with content creators. Earlier this week, Meta chief executive Mark Zuckerberg announced a new pilot for digital collectibles and NFTs on Instagram, as The Block covered.

For companies like Highlight, this might be good news. 

“We think this gets to what is so exciting about this technology for both creators and fans. If you think about business models that existed before now, fans maybe had a subscription to something a creator was doing, but there was no way you could take that subscription and show it off on a platform like Instagram,” said Nat. “Now all the NFTs that are minted on Highlight will be supported, from what we understand, on Instagram.”

© 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 team behind the stablecoin Beanstalk is raising $77 million in an over-the-counter loan from private investors as it seeks to revive the project following a major hack last month.

On May 7, the Beanstalk DAO — the decentralized autonomous organization that oversees the project – approved a governance vote that enables the core team to borrow funds and use them to replenish the project. This will lead to the issuance of a new stablecoin token and, over time, the project will seek to pay back investors affected by the April 17 hack through the issuance of yet another token.

According to the proposal, the team plans to issue a new token to OTC lenders, claiming that it will pay out a 500% yield until the loan is fully repaid. It’s unclear who might lend money to Beanstalk. 

The project’s founder Publius said in a Monday ask-me-anything announcement that the debt capital will go to whoever was affected by last month’s flash loan attack, which saw $182 million in various crypto assets stolen. After freezing and burning all of their own hacked stablecoins, the Beanstalk team has calculated it needs $77 million to reimburse losses incurred by investors. 

The attempted fundraising comes as woes at Terra’s algorithmic stablecoin, TerraUSD (UST), drew attention to the market. UST lost its peg to the dollar on Monday, dropping as low as $0.61 before recovering to $0.90 as of the time of writing. 

As opposed to algorithmic stablecoins or those that rely on collateral, Beanstalk used loans to back its value and investors would invest in Beanstalk debt assets known as “pods.” The pods function like time-vested bonds paying a high annual interest in a native governance token called Stalk.

Beanstalk didn’t 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.

Co:Create, a crypto startup building an infrastructure protocol to help NFT projects launch tokens and manage DAOs, has raised $25 million in a seed round led by Andreessen Horowitz (a16z).

Other investors include Tom Brady’s NFT platform Autograph, Packy McCormick’s Not Boring Capital, FTX Ventures’ Amy Wu, VaynerFund and the teams behind NFT fractionalization platform Fractional.art and Nike-acquired NFT studio RTFKT, the company announced on Tuesday.

‘Beyond the drop’

Co:Create says its protocol, currently under development, aims to help NFT projects “go beyond the drop,” meaning beyond just creating digital collectibles and selling them.

“We want to support decentralized brands of the future,” Tara Fung, co-founder and CEO of Co:Create, told The Block in an interview. “The combination of NFT plus fungible native token and DAO will just unlock the full potential of NFT projects and web3 brands.”

Fung said NFTs are more than just digital collectibles. They are “programmable assets” that can be used to unlock certain benefits, such as a game, an event, an experience or other goods and services.

She went on to say that if an NFT project launches its own token, it can grow its community in addition to its NFT holders. Fung gave an example of the recent launch of ApeCoin, which has helped expand the Bored Ape ecosystem beyond its collection holders since anyone can buy ApeCoin and be part of the Bored Ape community.

The Co:Create protocol will essentially provide a smart contracts platform that projects can use to mint NFTs and control royalties to be paid in their native token.

The initial version of the protocol will launch this fall, said Fung, adding that the mainnet will follow later.

Fung declined to comment on beta launch partners of Co:Create, but she said if “blue-chip projects” want to join, the platform will decide to onboard them.

Co:Create also plans to support big fashion brands that are exploring web3, such as Nike and Gucci. Fung said the firm is already in talks with several such brands. She believes that “eventually there will be no such thing as web3 company, just as there’s no longer an internet company,” as every web2 company will adopt web3 tools and technologies.

DAO plans

Co:Create is currently focused on its development. With fresh funding in place, the project also plans to double its current team of 10 people and sign partnerships with brands and creators for its protocol, said Fung.

Eventually, Co:Create itself plans to convert into a DAO and launch its own native token, known as CO, to hand over the protocol’s governance to a community of its NFT projects. Co:Create is currently part of Gesso Labs (pronounced “Jesso”, the Italian word for chalk).

© 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.

Dapper Labs, the company behind the NFT-focused blockchain Flow, is launching a $725 million fund to attract developers to the network.

The so-called ecosystem fund drew participation from an array of venture firms, including Andreessen Horowitz,  Coinfund, Digital Currency Group (DCG), Coatue Ventures, Dapper Ventures, Fabric Ventures, Spartan Group and Union Square Ventures.

These firms have committed funds to help support developers in creating new Flow-based applications in areas like gaming, infrastructure, decentralized finance (DeFi) and content creation. 

“We are thrilled to see such a strong vote of confidence in the Flow ecosystem from some of the world’s leading investors in web3 through their commitment to this fund,” Roham Gharegozlou, CEO of Dapper Labs, said in a statement on Tuesday.

Over the last few years, Flow has surged to prominence as a scalable blockchain for various NFT applications. According to a report by Block Research, the blockchain is home to about 200 NFT projects, including popular names like NBA Top Shot and NFL All Day.

Dapper Labs raised over $250 million at a $7.6 billion valuation in September 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.

Treasury Secretary Janet Yellen is still calling for stablecoin legislation by the end of the year.

In response to questioning on stablecoins from Senator Pat Toomey (R-PA) at a May 10 hearing, Yellen confirmed that “it is important, even urgent” that Congress pass stablecoin legislation. She further called it “highly appropriate” that Congress do so by the end of the year. 

Yellen specifically highlighted the weekend’s drama surrounding TerraUSD (UST), saying: 

“A stablecoin known as TerraUSD experienced a run and declined in value. I think that this simply illustrates that this is a rapidly growing product and there are rapidly growing risks.”

Toomey, for his part, is behind a piece of legislation seeking to address non-algorithmic stablecoins. In response to Yellen, he noted an “important distinction” with algorithmic stablecoins like UST. 

The hearing focused on the work of the Financial Stability Oversight Council, a supervisory regulator that the Treasury Secretary presides over. The President’s Working Group report on stablecoins from November highlighted that failing congressional action, FSOC should take action to regulate crypto. 

© 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.

Bitcoin self-custody company Casa raised $21 million in its Series A round, the company announced today.

The round was led by Acrew Capital, with participation from previous investors Avon Ventures, Stillmark, Tioga Capital, Castle Island Ventures and Lerer Hippeau. New investors also joined the round, including Positive Sum Ventures, AngelList CEO Naval Ravikant and Adobe Chief Product Officer Scott Belsky.

The US-based company, which specializes in building self-custody wallets, has also announced a new Application Programming Interface (API), a tool that allows a piece of software to more easily communicate with the outside world. The API will enable businesses to integrate multisig wallets into their products and allow users to authenticate using their personal wallets for third-party services while still maintaining control of their keys.

The company said in a statement that this “unlocks a wide range of capabilities”. Among them are confirming financial information for things like loan approval, managing retirement investments, and automatically depositing Bitcoin into users’ Casa accounts.

“With the launch of the Casa API, we will be able to go the next step and give our customers even more visibility into the bitcoin they hold as part of their long-term financial plan,” Ryan Radloff, CEO at Choice, a bitcoin-focused retirement account service and Casa partner, said in the statement.

“We’re excited to leverage the API to make the process seamless, from generating a new keyset to viewing your multi-sig wallet balance in real-time, from within your retirement account — this will be a bold leap forward for managing bitcoin as part of your long-term portfolio.”

© 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 Patryn, the co-founder of now-defunct exchange Quadriga CX, took a profitable punt on the stablecoin TerraUSD (UST) as it broke its peg with the dollar yesterday. 

According to transaction analysis by PeckShield, the Ethereum address associated with the ENS name Sifu.eth, which is owned by Patryn, made several UST trades in the last 24 hours — netting him $760,000.

We were unable to contact Patryn for comment.

UST is an algorithmic stablecoin that attempts to remain pegged to the US dollar through its relationship with the token Luna (LUNA). Yet over the last few days, it has lost its peg as large holders have rushed to sell the tokens. The Luna Foundation Guard — a non-profit entity designed to support UST — used its bitcoin reserves in an attempt to shore up the peg. Despite this, however, the token traded as low as $0.61 to the dollar on Monday.

While some were cautious that the token could fall lower, Patryn took the bet that it would return toward parity with the dollar. According to transaction analysis by PeckShield, he swapped $2.8 million of tether (USDT) for 3.88 million UST when it was near its lowest point. 

After that point, the value of UST rose toward the dollar mark — rising as high as $0.94. During this rally, Patryn sold the UST back for $3.56 million of USDT, resulting in a $760,000 profit. He then bridged some of the funds over to the Avalanche blockchain.

Patryn, who formerly went by the name Omar Dhanani, became known in the industry as one of the co-founders of Quadriga when it collapsed and turned out to be largely devoid of its users’ crypto. After that, he became a crypto trader operating under the pseudonym Sifu. 

Under this name, he co-founded a project called Wonderland — although he was forced to step down after his identity was revealed. 

In the last two years, Patryn claims he has made around $80 million from trading and investing — pointing his Twitter followers to a crypto wallets that has been associated with him. After leaving Wonderland, he transferred significant sums to Tornado Cash, a mixing service designed to obfuscate transactions. This means it is not clear to see where the majority of his funds are now held, although some remained in his public address.

Getting liquidated

The recent crypto market volatility wasn’t all clear sailing for Patryn though. It appears that another of his wallets was liquidated by none other than the Wonderland treasury itself.

According to screenshots shared by pseudonymous Twitter user dcfgod, Wonderland co-founder Daniele Sesta informed the Wonderland community that he had made money for its treasury by liquidating a bunch of crypto addresses. This is a practice where anyone can liquidate a position on a DeFi protocol that has become underwater and get paid for doing so. 

Yet Sifu responded in the same Discord server that he was included in the list of addresses, meaning that at least one of his addresses was liquidated by the very treasury that he used to manage.

© 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 price of Terra’s algorithmic stablecoin, TerraUSD (UST), regained some of its losses against the US dollar on Tuesday, having dropped as low as $0.61 amid weakening sentiment in the broader cryptocurrency market.

UST climbed to 0.92 against tether (USDT), a stablecoin that has kept its peg to the dollar, as of 8:55 a.m. ET, according to market data from Binance, which hosts the most traded market for the pair.

UST is an algorithmic stablecoin that attempts to keep parity with the dollar through its relationship with the LUNA token. A burning mechanism and the ability to always be able to sell $1 worth of LUNA for one UST are designed to keep it in check. Yet critics say the success of this operation depends on the strength of LUNA’s price and on its key DeFi platform, Anchor, continuing to produce an up to 20% yield to incentivize liquidity — something that’s on track to run out soon barring any fixes.

Both UST and the wider Terra ecosystem are supported by the Luna Foundation Guard (LFG), a Singapore-based nonprofit. In an attempt to defend the peg on Monday, LFG announced it had lent $1.5 billion worth of bitcoin and UST to third-party trading firms. LFG’s governing council includes Terraform Labs co-founder Do Kwon, Terraform Labs head of research Nicholas Platias and Jump Crypto president Kanav Kariya, among others.

UST, the third-largest stablecoin by total issuance, had fallen sharply on Monday amid a broader malaise in crypto prices that saw bitcoin drop below $30,000. Bitcoin is currently changing hands for about $32,000.

Meanwhile the price of Terra (LUNA), the Terra blockchain’s native asset that in normal market conditions can be burned in exchange for UST, has climbed to $33.63 from a low of $24.85, according to data provided by CoinGecko.

Crypto exchange Binance had earlier suspended withdrawals of LUNA and UST tokens, blaming “a high volume of pending withdrawal transactions” caused by network congestion.

© 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.