HK $100M & Siemens €60m tokenized bond; SEC vs. crypto; Kraken, BUSD & Paxos; BIS Project Polaris; J.P. Morgan on deposit tokens; Q4 2022 crypto report; plus $140M raised in 10 funding rounds.
16 February 2023
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Table of Content
🗞️The 15 news you should be aware of
💸PE/VC funding
⚖️Policies and laws
📚Reports, here is the TLDR
📈Charts of the week
💡Metaverse and NFT news, trends, and insights
🔦Company spotlight
📅Blockchain, Crypto, and Web3 events calendar
👩💻The job fair
📚The term of the week
📎Miscellaneous resources
🗞️ The 15 news you should be aware of
1. Hong Kong successfully offered inaugural $100M tokenized Green Bond
The bond was offered by the government of the Hong Kong Special Administrative Region of the People’s Republic of China (HKSAR) under its Green Bond Program, and is the first green bond to be issued by a government globally, the announcement by the Hong Kong Monetary Authority said.
2. US crackdown seeks to push crypto back to the fringes of finance
This article provides updates on the latest in US crypto regulation news. US financial regulators are taking a tough stance against the crypto industry by limiting access to the US banking system. This is likely to hinder new crypto projects and impact existing ones. The wall between crypto trading and the banking and securities markets is designed to guard against potential systemic risks.
3. Crypto exchange Kraken ends staking program in $30 Million SEC settlement
Kraken has agreed to pay $30 million to settle the Securities and Exchange Commission's allegations that it violated US securities laws with its crypto-asset staking products. The exchange will discontinue the products. The case makes it clear that staking-as-a-service providers must register and provide full, fair, and truthful disclosure and investor protection.
4. BIS Innovation Hub invites offline CBDC providers for Project Polaris
The project Polaris is one of the two initiatives unveiled by the BIS innovation hub in February. On this, the BIS is looking for offline solution providers to apply to present their offerings by February 24. Resilience and financial inclusion are among the many drivers for offline CBDC.
5. Morgan Stanley: Falling Stablecoin issuance is negative sign for crypto trading
The bank notes that U.S. regulators have begun limiting stablecoin products, adding that stablecoin issuance is important for crypto traders. Falling stablecoin market capitalization is an indication of falling cryptocurrency liquidity and leverage, the equivalent of quantitative tightening for the crypto market.
6. Polygon eyes mainnet beta release for zkEVM Layer 2 next month
Polygon is planning to release a new Layer 2 scaling solution, zkEVM, in a mainnet phase on March 27. zkEVM will be a zero-knowledge or ZK-Rollup that performs off-chain computations on a secondary layer for faster and cheaper transactions while prioritizing security. To expand Ethereum network's scaling capabilities further.
7. Circle allegedly complained to regulator re Binance stablecoin
Circle, the issuer of the USDC stablecoin, filed a complaint to the regulator New York State Department of Financial Services (NYDFS) about the Binance USD (BUSD) coin not being fully backed. So from the SEC’s perspective, Paxos only had authority from NYDFS to issue BUSD on the Ethereum chain.
8. Bored Ape owner burns $169K NFT to move it from Ethereum to Bitcoin
Bored Ape Yacht Club (BAYC) #1626 was permanently removed from circulation on Ethereum this weekend and symbolically transferred to Bitcoin. The burn took place using a newly developed feature for Ordinals named Teleburn. Teleburn allows users to assign an existing asset from another network to a Bitcoin Inscription while removing it from circulation, enabling the token to be transferred between chains.
9. DBS eyes Hong Kong digital asset license, with domestic volumes up 70%
DBS is planning for digital asset license in Hong Kong to provide digital assets trading services to its customers. DBS is one of the early banks to start crypto trading launching its exchange in late 2020 in Singapore. Currently, DBS provides services to only accredited and professional investors.
10. Siemens issues €60m digital bond on public blockchain
Siemens issues a €60 million ($65m) bond on the Polygon public blockchain under Germany’s eWpG legislation. The issuance was organized by Hauck Aufhäuser Lampe Privatbank, which acted as bond registrar and provided the digital asset custody solution for the keys. DekaBank, DZ Bank, and Union Investment bought in the bond.
11. India’s retail CBDC pilot does 770,000 transactions in 2 months
India’s primary digital currency motivations are to reduce the cost of distributing cash and for financial inclusion. The Reserve Bank of India (RBI) said that the number of transactions using its retail CBDC had reached 770,000 since the pilot started in late November 2022. So far, there are 50,000 end users and 5,000 merchants involved.
12. Wormhole Bridge exploiter supplies $46M to crypto lending platform maker, buys wrapped ether
The exploiter behind last year’s $320 million exploit of the solana-ether Wormhole bridge has exchanged part of the fraudulently gained holdings for ether and may well be earning yields on staked tokens. The purchases temporarily created buying pressure on ether, with prices increasing to over $1,530 from $1,520.
13. J.P. Morgan promotes bank deposit tokens versus stablecoins
Consultants Oliver Wyman in conjunction with J.P. Morgan published a report on tokenized bank deposits as a form of payment. the report delves into the differences between stablecoins and deposit tokens, arguing in favor of regulated deposit tokens Smaller banks such as Signature also have blockchain-based payment networks.
14. 684 million BUSD burned for redemptions amid US regulatory scrutiny
Just over a day after it categorically denied regulator claims Binance USD (BUSD) is security, Paxos has burned some 684 million of the stablecoin for U.S. dollar redemptions, on-chain data show. Dollar parity redemptions for BUSD will be supported through at least February 2024, Paxos said.
15. PayPal pauses stablecoin project amid Paxos probe
PayPal had hoped to debut the stablecoin, which will be backed one-for-one by the US dollar, in the coming weeks, but will delay that work as it seeks to understand the changing regulatory landscape for such digital assets, according to a person with knowledge of the matter.
💸 PE/VC funding
1. NFT animation shop Superplastic raised $20M Series A
Amazon, Google, and Kering back NFT animation studio making 'synthetic celebrities'. Craft Ventures, Galaxy Digital, Sony Japan, Scribble Ventures, Kakao, Animoca Brands, Day One Ventures, and Betaworks also contributed.
2. Maven 11 and Blockchain Capital back Modular Cloud $1.7M round
Blockchain tooling provider Modular Cloud has raised $1.7 million in pre-seed funding. NFX, Celestia Foundation and Eclipse were among the investors who participated in the round, said the company in a release.
3. Ironblocks raises $7M to build blockchain cybersecurity platform
Blockchain cybersecurity platform Ironblocks has raised $7 million in a seed round, co-led by Collider Ventures and Disruptive AI. Other investors include Samsung Next, Quantstamp and ParaFi.
4. Nomura's Laser Digital invests in DeFi protocol Infinity Exchange
The Ethereum-based lending and borrowing protocol are building infrastructure for the institutional adoption of web3. Laser's investment is added to the $4.2 million seed round Infinity raised last September from several backers, including GSR and Flow Traders
5. Bain Capital Crypto leads Orb Labs' $4.5M raise
Cross-chain tooling and protocol developer Orb Labs has closed a $4.5 million seed round led by Bain Capital Crypto. Other investors in the round include Shima Capital, 6th Man Ventures, Modular Capital and SevenX Ventures, said the company in a release.
6. Former Jump Trading developers raise $19M to build Monad blockchain
Monad Labs raises $19 million from Dragonfly Capital, Naval Ravikant, Cobie, Hasu and others. The projects is building an Ethereum virtual machine (EVM)-compatible Layer 1 blockchain.
7. Credit Suisse leads $65M Series B in digital asset firm Taurus
Credit Suisse, Switzerland's second-largest bank by assets, led the round, with Deutsche Bank, Germany's largest bank by assets, Pictet Group, and Cedar Mundi Ventures, participating, Taurus announced Tuesday.
8. Web3 tower defense game developer Omega Royale raises $2.1M
The company aims to use a novel play-to-mint model, where players who are dedicated to the game and rank the highest can mint the collectible non-fungible tokens (NFTs) in the game.
9. CMCC Global leads $5M round into web3 gaming platform Ajuna
Switzerland-based web3 gaming platform Ajuna raised a $5 million round led by crypto venture capital firm CMCC Global. The platform enables gaming development engines Unreal and Unity to integrate with blockchain technology.
10. Mino Games secures $15M Series B led by Standard Crypto
The Series B was led by Standard Crypto, with participation from Boost VC, Collab+Currency, Earl Grey Capital, and Konvoy Ventures. Previous investors include SYBO Games and Andreessen Horowitz.
⚖️ Policies and laws
1. Gensler opens new regulatory front for crypto firms: custody
Gary Gensler argued that crypto firms are not in compliance with current rules around safeguarding digital assets. Gensler’s remarks, and a new proposed rule, indicate a new regulatory and legal headache for crypto firms in the U.S.
2. The SEC cracks down on crypto
The SEC would make it harder for crypto firms to be “qualified custodians" or companies that hold client assets for money managers. The U.S. regulator has been increasing its scrutiny of crypto and recently went after stablecoin issuer Paxos and its BUSD stablecoin.
3. EU publishes text for Basel III crypto rules for banks
EU confirms that banks are expected to treat crypto-assets with a 1250% risk weighting as an interim measure until detailed legislation is implemented. That means they have to hold a euro in capital for every euro of crypto on their balance sheets. Basel intended the 1250% risk weighting mainly to apply to cryptocurrencies, not securities, but the draft EU text fails to make this distinction.
4. Warren pledges to reintroduce crypto anti-money laundering bill
Warren during a Senate Banking Committee hearing on crypto said, they plan to reintroduce legislation that extends anti-money laundering to a broad array of crypto ecosystems, this would include digital asset wallet providers, validators, nodes, and other blockchain participants. In just one-year international drug traffickers raked over $ billion dollars through crypto
5. Brazil's oldest bank says you can now pay your taxes with crypto
Through a partnership with Bitfy, a startup that was funded by Banco do Brasil’s VC arm, clients can use the app to instantly convert crypto in their account into the local currency to pay and settle a tax bill. Brazil has been a leader in digital payment innovations with its PIX system and passed new crypto-friendly legislation last year.
6. South Korea’s crypto firms will have to self-regulate under new guidance
South Korean securities firms and token issuers now have some clarity on how security tokens are defined under new guidance published. Under this guidance, the onus will first fall on firms to regulate themselves. Legislators will next reshape key existing laws to cover security tokens. Regulators will propose amendments to various acts.
📚 Reports, here is the TLDR
Despite a tough year for cryptocurrency investors in 2022, PitchBook's latest quarterly wrap-up shows a more nuanced view of trends and figures. The quarterly deal counts decreased while annual records were still broken, suggesting a more complicated picture.
Takeaways include:
VC deal count and value totals dropped 39.6% and 47.9% on a quarterly basis, respectively.
Despite the declines, 2022 still set records for crypto, reaching all-time highs for capital invested, at $26.2 billion, and number of deals set, at 2,541. Investment rose across all stages, with seed funding up 53.8% year-over-year.
Several emerging opportunities remain for crypto investors, including real-world asset tokenization and the creation of more providers to stake tokens.
📈 Charts of the week
The below figure summarises how DeFi lending protocols work
The below figure shows that openSea recorded a surge in its user base for the second month in a row, which grew to 329.4K users in January, up 10.6% MoM
💡Metaverse and NFT news, trends, and insights
1. Web3 job fair goes virtual: attendees can explore roles in the Metaverse
Hype is hosting an inaugural Web3 job fair on Gather, connecting crypto firms with over 2,000 professionals interested in Web3 roles, with attendees free to explore technical and non-technical positions.
2. Matching crypto wallets to Twitter accounts: Web3 marketing takes off
Addressable, a new tool, matches 17 million crypto wallet holders to Twitter accounts to help marketing professionals in the crypto segment understand and reach specific audiences. Addressable is looking to match wallets to social media accounts on Instagram and TikTok in the future.
3. Microsoft culls the Metaverse team it created 4 months ago
Microsoft has dissolved its Industrial Metaverse Core Team, a team of about 100 employees that was formed just four months ago to build industrial networks and assist users with metaverse operations. The team worked with customers across various industries, including Coca-Cola, Unilever and General Motors.
4. K-pop girl group TripleS dances to tune fans vote via NFT-inspired governance
Fans of the group can purchase governance tokens on the blockchain-based marketplace, Hoo.com, to participate in the decision-making process. The move marks another example of how NFTs and blockchain technology are being used to engage fans and drive community involvement in the music industry.
5. Gaming company Square Enix partners with Polygon for NFT Art Project
Square Enix has teamed up with Polygon for an NFT art project featuring original artwork from the Final Fantasy franchise. The NFTs will be sold via auction on the Polygon network, with a portion of the proceeds going to charity.
6. New Lamborghini NFT collection revs up for release on VeVe
Lamborghini has announced the release of an NFT collection in partnership with digital collectibles platform VeVe. The collection will feature digital versions of the company's iconic car models, and each NFT will be backed by a physical edition of the corresponding car.
🔦Company spotlight
The company: 👉 Flowcarbon 👈 operates at the intersection of carbon and new technology to protect the earth’s natural carbon sinks and scale quality carbon reduction and removal projects. By connecting corporations, individuals, and developers to a carbon market rich with incentives, Flowcarbon is sparking collective action in financing solutions that mitigate climate change, protect the planet, and make natural assets more valuable intact than destroyed.
The story: Flowcarbon was founded and built by a team with collective experience across carbon, sustainability, and technology. Their goal is to accelerate decarbonization through the preservation and protection of earth’s natural ecosystems, which are among the most immediate and cost-effective carbon sinks while investing in longer-term carbon removal and reduction projects.
Why should I care: Realizing that a key impediment to scaling carbon solutions is the opaque over-the-counter market for carbon credits, Flowcarbon set out to bring carbon credits onto the blockchain to create democratized access, price transparency, immutable tracking of credits as they change hands, and incentivize high impact climate change mitigation projects.
📅 Blockchain, Crypto, and Web3 events calendar
….for the next couple of months
February 2023
The Blockchain Event | Feb 14-17, 2023 | Florida, USA
Fintech & Crypto Summit Bahrain | Feb 15-16, 2023 | Bahrain
European Blockchain Convention | Feb 15-17, 2023 | Barcelona, Spain
Blockchain Fest 2023 | Feb 16-17, 2023 | Singapore
Solana Melbourne Hacker House | Feb 20-24, 2023 | Melbourne, Australia
Global Digital Assets Investment Summit | Feb 22-23, 2023 | Hong Kong
DeFi Retreat Europe | Feb 23, 2023 | Lisbon, Portugal.
NFT Paris 2023 | Feb 24-25, 2023 | Paris, France
ETHDenver | Feb 24-Mar 5, 2023 | Denver, CO, USA
Blockchain Economy London Summit 2023 | Feb 27-28, 2023 | London, UK
Interop Summit | Feb 27-28, 2023 | Denver, CO, USA
Blockchain Life | Feb 27-28, 2023 | Dubai, UAE
Miami Web3 Week | Feb 27-Mar 5, 2023 | Miami, FL, USA
March 2023
🆕 Web3 Toronto Summit 2023 | Mar 1-2, 2023 | Toronto, Canada
🆕 Supermoon Tower ETH Denver | Mar 1-3, 2023 | Denver, CO, USA
Advancing Bitcoin Conference | Mar 2-3, 2023 | London, UK
Crypto, Blockchain & Metaverse Expo | Mar 3-4, 2023 | Dubai, UAE
Saudi Meta Show | Mar 8, 2023 | Riyadh, Saudi Arabia
Empower: Energizing Bitcoin 2023 | Mar 8-9, 2023 | Houston, TX, USA
Crypto Expo Dubai | Mar 8-9, 2023 | Dubai, UAE
Blockchain Economy Dubai Summit | Mar 8-9, 2023 | Dubai, UAE
Blockchaincon Latam 2023 | Mar 9-11, 2023 | Lima, Peru
🆕 World Digital Assets Investment Summit | Mar 10-11, 2023 | Dubai, UAE
🆕 Arts DAO Fest | Mar 11, 2023 | Dubai, UAE
Women In Blockchain Summit | Mar 13-15, 2023 | Limassol, Cyprus
Blockchain & Fintech Week Tel Aviv | Mar 13-15, 2023 | Tel Aviv, Israel
Sustex - Blockchain for Climate | Mar 15-16, 2023 | Dubai, UAE
ETHDubai | Mar 15-16, 2023 | Dubai, UAE
Solana Hacker House | Mar 15-19, 2023 | Ho Chi Minh City, Vietnam
Virtuality Web3 Summit | Mar 16-17, 2023 | Paris, France
Blockchain Africa Conference | Mar 16-17, 2023 | Johannesburg, South Africa
ETH Porto | Mar 16-18, 2023 | Porto, Portugal
5th Blockchain Int’l Scientific Conference | Mar 18, 2023 | Manchester, UK
Crypto Expo Europe | Mar 19-21, 2023 | Bucharest, Romania
NFT LA | Mar 20-23, 2023 | Los Angeles, USA
FOMO Asia Genesis Conference | Mar 20-23, 2023 | Hong Kong
Paris Blockchain Week 2023 | Mar 20-24, 2023 | Paris, France
DC Blockchain Summit | Mar 21, 2023 | Washington, DC
Art Basel | Mar 23-25, 2023 | Hong Kong
Nigeria Bitcoin Conference | Mar 24-25, 2023 | Lagos, Nigeria
American Metaverse Summit | Mar 29-30, 2023 | Miami, FL, USA
WOW Summit Hong Kong 2023 | Mar 29-30, 2023 | Hong Kong
Crypto Assets Conference 2023 | Mar 29-30, 2023 | Frankfurt, Germany
Miami NFT Week | Mar 30-Apr 2, 2023 | Miami, FL, USA
April 2023
Pantera Blockchain Summit | Apr 3-4, 2023 | San Francisco, CA, USA
🆕 NFT.NYC 2023 | Apr 12-14, 2023 | New York, USA
🆕 DAO Tokyo | Apr 13, 2023 | Tokyo, Japan
🆕 ETHGlobal Tokyo | Apr 14-16, 2023 | Tokyo, Japan
🆕 EthereumZuri.ch | Apr 14-16, 2023 | Zurich, Switzerland
🆕 Bitcoin Alive 2023 | Apr 15, 2023 | Sydney, Australia
👩💻The job fair
Onyx by J.P. Morgan : Multiple roles, Greece
Stacks Foundation : Blockchain Engineer, NY/Remote
Stacks Foundation : Blockchain Security Engineer, Remote
Cash App : Product Manager, Sanfranciso, CA
📚The term of the week
Pump and Dump (PND): a scheme whereby a group of Cryptocurrency traders artificially drums up enthusiasm for a Coin or Token in order to instigate a coordinated purchasing frenzy. As the Coin’s price climbs, other traders, unconnected to the Pump and Dump group, latch on to the buying spree, further boosting the Coin’s price. Then the group proceeds to Dump the Coin by selling at the now-inflated price. While the Pump and Dump group earns a profit, the traders who purchased the Coin based on artificial enthusiasm are left with losses.
📎 Miscellaneous Resources
The opinions are our own. The content of this newsletter is not intended to serve as financial advice and is for general informational and educational purposes only. We do not warrant, endorse, or assume responsibility for the accuracy of any information offered by the third-party websites linked above.