SEC Secures Seed Funding
Hi everyone, and welcome to Chain reaction.
In our Chain Reaction podcast this week, Anita and I chatted with Jill Gunter of Slow Ventures about why there are so many blockchains and if we’re heading towards a future where everything is built on one chain. More details below.
Last week, we discussed a bit about Bitcoin’s political isolation that occurs due to its energy footprint. In this week’s podcast, we covered how the Wikimedia Foundation banned crypto donations after accepting them for eight years simply because of Bitcoin and Ethereum’s energy footprint. More than a decade later, this saga has only just begun. This week we talked about how crypto cops are trying to keep up with the Web3 explosion.
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This week, the government’s top crypto cops got new funding to build their team and they put out a nice little press release to tell the crypto industry they’re coming for them. SEC expands team from 30 to 50 and renames former “Cyber Unit” to “Crypto Assets and Cyber Unit”. Hiring up to 20 more enforcement officers is a big deal for the SEC, although in cryptoland that kind of staffing is what happens to most startups after a seed fundraiser.
It’s always been an uphill battle for the SEC, but 10 years ago the threat of someone spinning headlines willy-nilly from their basement wasn’t quite what it is today. today. The crypto faucet has posted thousands and thousands of suspicious projects that I’m sure the regulator would love to touch, but right now they’re left with the near impossible task of moderating an industry that’s exploding and expanding its ambitions with at -the most modest consideration for the spirit of securities law.
As we touched on a bit in the podcast this week, news of the SEC crypto unit expansion hasn’t been warmly received by folks in the industry, say what they want, it’s more advice before there’s no more application. It’s not entirely surprising, of course. This has always been a great little talking point for crypto companies on the subject of regulation – they can say they actually want more regulation because they know how far off most of that regulation is. Then, when action is finally taken against them by the government, they may complain that the underfunded agency is going after them because they are singling them out from others who are doing the same thing. This has been the case for a while now.
That’s not to say the SEC didn’t do anything; I’m sure they’re much more focused on the big cases at this point. The agency says it has filed more than 80 “enforcement actions” against fraudulent, unregistered deals “resulting in monetary relief totaling more than $2 billion.” It’s a nice chunk of change but still a drop in the bucket.
Now, for the part of the SEC, they say they are focused on using their enhanced team to crack down on fraudulent or illicit activity in the following areas: crypto asset offerings, crypto asset exchanges, crypto asset lending and staking products, decentralized finance (“DeFi” platforms), non-fungible tokens (“NFT”) and stablecoins. That’s…pretty much all there is to it, though they didn’t say anything specifically about the metaverse I guess…For the folks warning of an impending regulatory crackdown on crypto , I think it’s important to set expectations and take stock of who exactly is on the other side of the equation.
Hello chain reaction friends! It’s Anita again with an update on our latest podcast episode.
Yuga Labs’ chaotic NFT land sale stole the show in the crypto world this week, temporarily clogging the entire Ethereum network and leaving some users paying thousands of dollars in gas fees for NFTs they have never actually obtained. Yuga has pledged to refund gas fees on failed trades, but the crypto community has been abuzz with all sorts of hot takes and even conspiracy theories about why and how we got here, that Lucas and I unpacked in the broadcast.
Our guest this week was Jill Gunter, venture capital partner at Slow Ventures and co-founder of a new privacy-focused Layer 1 blockchain, Espresso Systems. I already got into the weeds with Jill in my Espresso post after her Series A last month, so for this week’s pod Lucas and I asked her some bigger questions that we thought about, like why he there are so many different blockchains in the first place and what it will take for tradfi to get to grips with crypto.
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follow the money
Where startup money is moving in the crypto world:
Crypto Decrypt Publication Raises $10M From Hack VC, Canvas Ventures and More
Americana “Physical” NFT Market Receives $6.9M From Seven Seven Six
DAO tooling startup Syndicate raises $6M from a16z, Carta and others
Sports betting app NFT Stakes gets $5.3 million from DCG
DeFi startup MYSO raises $2.4 million from Huobi
Esports group Metaverse Team DAO receives $5 million from Klaytn and Animoca
Web3 sports platform OneFootball secures $300 million from Liberty City Ventures
Argent crypto wallet app fetches $40 million from Index
Layer 2 blockchain Minka raises $24M from Tiger
NFT/crypto wallet Venly receives $23 million from Courtside Ventures
Some additional crypto analysis from our TechCrunch+ subscription service hosted by Jacquelyn Melinek
Why the Axie Infinity Co-Founder Thinks Play-to-Earn Games Will Drive NFT Adoption
Popular play-to-earn crypto game Axie Infinity has made huge strides in 2021, going from a massive user spike to total revenue up over 50,000% from the same period last year. But as we’re nearly halfway through 2022, a question arises: Does Axie hold up to its hype? The data doesn’t quite say it, but Axie co-founder Jeff “Jiho” Zirlin is unfazed. “You can’t have exponential growth all the time; there is a refractory period,” he said, but the game has more plans in the works for the next growth cycle.
Crypto Bahamas Signals Stronger Ties Between Old and New Worlds of Finance
I may be recovering from a sunburn, but don’t feel bad for me. I was in the Caribbean at Crypto Bahamas, a conference co-hosted by crypto exchange FTX and investor forum SALT, where over 2,000 invite-only attendees discussed the nature of crypto as it thrives on the traditional financial market and what is needed for the future. of this nascent digital asset industry to succeed. The event was also significant as it was both FTX and SALT’s first crypto-focused conference and appears to be the start of a bridge being built between the two worlds of traditional finance and decentralized finance.
Bitcoin miners say energy efficiency and regulatory certainty are key to industry success
Speaking of Crypto Bahamas… some of the biggest names in bitcoin mining at the event took the stage and talked about what they believe is first and foremost necessary for this industry to succeed: efficiency and regulatory clarity. Once the pace is regulated, the pace of innovation could pick up for miners across the United States, panelists said. But what does this mean for the energy industry as a whole?
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