FinTech news in FTX category

The startup has raised capital in a pre-product financing round from Coinbase Ventures, Circle Ventures, SV Angel, SALT Fund, P2P, Third King Venture Capital and Motivate Venture Capital. Now, he has raised $5 million for his own startup, Architect, which aims to make trading infrastructure for large crypto investors. A startup like this could meet current market demand from big players for more unified and accessible platforms to connect their crypto services, instead of having a handful of tabs and servers open. The startup is launching pre-product, so its flagship service will have to be seamless and provide an easier user experience to trump other crypto services out there.

Genesis Global Holdco and two of its lending business subsidiaries Genesis Global Capital and Genesis Asia Pacific filed voluntary petitions under the bankruptcy code for SDNY, its press release stated. On January 12, the U.S. Securities and Exchange Commission charged Genesis and cryptocurrency exchange, wallet, and custodian Gemini for the unregistered offer and sale of securities to retail investors through Gemini Earn crypto asset lending program. The firm struggled to raise capital for its lending unit, cut 30% of its staff in early January and took a financial hit from major catastrophic crypto events last year like the collapse of crypto hedge fund Three Arrows Capital and the decline of crypto exchange FTX. Aside from Genesis, DCG is the parent company of digital currency asset manager Grayscale, media company CoinDesk, mining and staking company Foundry, digital asset exchange and wallet Luno and API-centric platform TradeBlock.

The three-year-old company has been dealing with shrinking market share and layoffs, yet according to a Financial Times piece from earlier this year, its founder was able to take $195 million worth of shares off the table while also retaining nearly 40% of the company and voting control. In a story just tonight about Pipe, journalist’s Mary Ann Azevedo writes that the three-year-old marketplace has only one outside board member who is not a cofounder of the company, and that individual has been a VC for three years. And, Gurley pegs secondary sale transactions (red flag #8) as an obvious danger. Another issue is dual-class shares (red flag #3), which in many cases give entrepreneurs the power to ignore the wishes of investors.

This April, FTX announced a partnership with AZA Finance to roll out African and digital currency pairs and expand trading in nonfungible tokens (they managed to launch the fiat rails for Ghana and Senegal prior to FTX’s collapse). FTX offered to invest in Bitnob via stablecoins, to be held in custody on the defunct exchange, but the Nigerian crypto platform declined, according to two people familiar with the matter. There has been speculation that FTX and Alameda may have required their portfolio companies to hold their assets on the FTX exchange as part of their investment terms. In one case, FTX erroneously included BTC Africa, the parent company of Kenya-based payment automation and settlement platform AZA Finance, and its subsidiaries as entities under its Chapter 11 bankruptcy filings.

Notably, former SoftBank COO Marcelo Claure, who stepped down in late January after a reported battle over pay, had this to say about the FTX fiasco: journalist has reached out to SoftBank for comment on its investment in FTX. Also among FTX’s long roster of investors are: NEA, IVP, Iconiq Capital, Third Point Ventures, Tiger Global, Altimeter Capital Management, Lux Capital, Mayfield, Insight Partners, Lightspeed Venture Partners, Ribbit Capital, Temasek Holdings, BlackRock and Thoma Bravo. The notorious Japanese investment conglomerate SoftBank, for example, is just one of many such firms that backed FTX after the startup raised a $400 million funding round in January, valuing the company at a staggering $32 billion. FTX files for bankruptcy, CEO Sam Bankman-Fried steps down

Joepegs, an NFT marketplace on the Avalanche blockchain, raised $5 million in a seed round led by now-defunct FTX Ventures and the Avalanche Foundation, its co-founders who go by the pseudonyms Cryptofish and 0xMurloc, exclusively told journalist. The marketplace launched in May and has grown rapidly to the largest NFT marketplace on Avalanche with over $3.4 million in secondary NFT sales and 12,000 users. Earlier this year, Avalanche dove further into the NFT space after partnering with the largest NFT marketplace, OpenSea, which now operates on the blockchain alongside other platforms like Joepegs and Kalao. It also has an in-house production unit, Joe Studios, as well as an NFT Launchpad, which has on boarded over 50 projects to the Avalanche ecosystem, the company said.

Since Sam Bankman-Fried’s crypto empire, made up of FTX, Alameda Research, and FTX Ventures, collapsed last week, there have been various reports of companies whose money are stuck on FTX, its crypto exchange platform. FTX, for instance, led the $150 million Series C extension round in Chipper Cash, an African payments company; Alameda Research, on the other hand, has backed Nestcoin, Nigeria- and Kenya-based web3 company Mara, Congolese web3 startup Jambo. Some of them include Galois Capital, a hedge fund with half of its assets stuck on FTX; Genesis Trading, which had about $175 million locked on the crypto exchange; Multicoin, the famed web3 venture capital firm that had nearly 10% of its assets under management trapped. According to several reports, companies with money stuck on FTX might get their money back depending on how much FTX’s assets are ultimately worth.

Decentralized finance (DeFi) is often associated with trusting blockchain technology to execute services through smart contracts, while centralized finance (CeFi) usually refers to more traditional business models and involves having people manage funds and manually execute services. As the crypto market digests the past few days of chaos, venture capitalists see the moment as a warning, but also an opportunity for the growth of decentralization and maturation of the larger blockchain space. When there are massive crashes and burns, it speaks to what we’ve been seeing over the past decade: It the Wild West out there, Samantha Lewis, principal at Mercury, said to journalist.

Alameda Research, a crypto trading firm run by FTX chief Sam Bankman-Fried, was caught in the eye of the storm this week when its leaked balance sheet financials revealed unusually close ties with FTX through the exchange’s native FTT token. In addition to the liquidity crisis itself, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are investigating FTX’s relationship with its sister entity Alameda Research as well as with FTX US. Crypto trading behemoth FTX fell from grace this week after the exchange experienced a liquidity crunch and agreed to give its rival, Binance, the option to purchase the company non-U.S. operations in what appears to be a bailout. Binance and FTX both revealed yesterday that the former had signed a non-binding letter of intent that gives it the option to purchase FTX pending due diligence.

Withdrawal transactions for customers using FTX, the third largest crypto exchange by volume, have seemingly been limited to a nominal amount or none at all, according to multiple on-chain data sources. On Monday, Bankman-Fried tried to calm the waters in regard to FTX’s liquidity via a series of tweets indirectly responding to Zhao and Binance’s liquidations. Stablecoin withdrawals from FTX dropped to zero around 6 a.m. ET on Tuesday, according to data on CryptoQuant. FTX’s stablecoin reserve also decreased 93% over the past two weeks, and it has injected USDC liquidity from Alameda Research wallets, Ju said.

A new web3-focused production hub, Trustless Media, has launched out of stealth mode as it aims to build an NFT community-owned media company. Trustless Media plans to grow its community beyond the initial 1,000 NFT community members by expanding the network.

Crypto exchange FTX is open to partnering with Robinhood Markets, its CEO Sam Bankman-Fried said in a statement.

In addition to the announcement of Saga, Yakovenko shared the launch of the Solana Mobile Stack, or SMS, which is a web3 layer for Solana built on the phone. The co-founder and CEO of Solana, Anatoly Yakovenko, had a Steve Jobs moment when he stood in front of an auditorium in New York City and announced the launch of Saga, an Android web3-focused smartphone.

The exchange says it will not receive payment for order flow (PFOF), a method for order fulfillment Robinhood became notorious for that involves the exchange receiving payment from market makers for directing orders their way.

Bitcoin’s most prominent layer-two, the Lightning network, can execute hundreds of thousands of transactions per second by settling transactions off-chain in a separate ledger, Lightning Labs CEO and co-founder Elizabeth Stark told journalist.

KuCoin, which has amassed over 18 million users in 200 countries and regions and is one of the largest exchanges by daily SPOT trading volume, plans to invest the fresh funds in broadening its portfolio of crypto wallets, GameFi, DeFi, and NFT platforms and DAOs, Lyu said. KuCoin valuation has surged to $10 billion in its first financing round.

The exchange, one of the largest in India and which also helps power the orderbook of rival Andreessen Horowitz-backed CoinSwitch Kuber (valued at $1.9 billion), is also exploring building a ventures arm, as is popular among other global exchanges such as Coinbase, FTX and Binance2, Gupta said, but it’s not something CoinDCX is planning to launch anytime soon, he suggested.

Binance.US raised over $200 million in its first external funding round, putting its pre-money valuation at $4.5 billion as it builds out a roadmap for an initial public offering (IPO), its CEO Brian Shroder. Binance.US is one of the largest digital asset exchanges by trading volume in the U.S. with a 24-hour trading volume of $306 million, according to data on CoinMarketCap. The exchange provides licensed services to 45 states with plans to operate in all 50 states and all U.S. territories, Shroder said.

Payments giant Stripe already powers a pretty major swath of the web financial infrastructure, now it’s launching crypto payments support to give customers an easier path to onboard web3 users and interact with cryptocurrencies.

It uses integrations to link to different investment platforms for stocks, crypto, and other illiquid assets, though Gonen declined to share how many platforms are partnered with Compound in this manner.

Crypto.com, a popular cryptocurrency exchange, has extended its venture arm fund size to $500 million as it looks to more aggressively back early-stage startups to help the nascent ecosystem grow, following similar moves by rivals Binance, Coinbase and FTX.