🏦 Crypto Friendly Banks in 2023

Core DAO $200M Fund | Evgeny of Wintermute

Author

Marco Manoppo
April 21, 2023

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Good Morning,

Crypto markets are down but Tether just minted $1 billion USDT. Maybe…?

EU approved MiCA, a new crypto licensing regime. The new rules cover stablecoin, crypto exchanges/wallets, and token issuers — it will come into effect over the next two years.

In Today's Email:

  • What Matters: Crypto-friendly banks in 2023 🏦

  • Founders-Investors Highlight: Evgeny Gaevoy, Founder of Wintermute 📈

  • Deal Flows: Core DAO $200M Ecosystem Fund 🤝

Narratives: Pay attention to low and mid-cap DEX token. From Synthetix’s Kwenta to Level Finance and Radiant. There seems to be a resurgence across the theme.

WHAT MATTERS

The State of Crypto Banking

State of play: The crypto industry’s reputation has been hit hard by multiple bad actors and bankruptcy events. As a result, getting banking services for crypto-related businesses is becoming difficult.

Coincub recently released a report covering this topic.

What constitutes as a “friendly” crypto bank differs from one source to another.

  • Friendly: Most seems to agree that friendly means customers can make large transfers to any crypto exchange without being asked inconvenient questions.

  • Really Friendly: One step above friendly means that customers can directly purchase crypto on credit.

The key takeaway: Europe has the largest number of crypto-friendly banks, followed by Asia.

  • Europe is the largest crypto economy, especially with MiCA being adopted. Other banks and countries in region such as Sygnum and SEBA in Switzerland and Bank Frick in Liechtenstein are position themselves to take on more crypto clients.

  • The UK also has a strong intention to catch up to other EU countries in terms of banking crypto businesses.

  • In Asia, Japan, South Korea, and Singapore lead the way. Banks such as OCBC, DBS, and Nomura have announced crypto-oriented initiatives.

  • Bermuda is another strong potential, even Coinbase is looking at the country. Jewel Bank has received a digital asset business license from the Bermuda Monetary Authority

  • The Middle East has also seen a surge of crypto friendly banks such as Emirates NBD and RAKBANK.

Why it matters: Your business can’t operate effectively without a banking relationship.

  • No matter how on-chain your products are, you’re most likely using web2 infrastructures such as AWS. There are also other operational expenses that can’t always be paid in USD stablecoins.

For builders: Having multiple banking relationships is useful to hedge your risks. Don’t store 100% of your treasury capital on-chain, diversify into multiple banking partners where most of your businesses happen, or where most of your employees reside.

For investors: You ideally have the banking infrastructures set-up on multiple regions, or with a global bank that would be willing to work with you. Think carefully about how to handle your SAFT, token warrant, or any on-chain to off-chain conversion.

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BUILDER-INVESTOR HIGHLIGHT

Evgeny Gaevoy, Founder of Wintermute

Evgeny Gaevoy is the Founder and CEO of Wintermute, a crypto market making firm. The company provides liquidity on over 50 exchanges. Its products include liquidity provisions on spot and derivatives markets, OTC, and a venture arm.

  • Wintermute is a notable name amongst crypto-natives having been involved in the market making process of high-profile L2 tokens, including Optimism and Arbitrum.

  • Evgeny has also joined the Board of The Block, a crypto media company.

  • Wintermute has also launched its own decentralized exchange, called Bebop, on the Polygon blockchain.

Previous backgrounds: Evgeny was previously the Head of ETF Business Expansion at Optiver, a notable tech-driven trading firm. He has an extensive experience in the trading business having worked at Optiver for more than 10 years.

The big idea: Wintermute aims to become a new generation algorithmic trading firm with a focus on crypto asset. It’s a simple business model that has existed for a long time in TradFi, but with crypto-natives products and elements.

  • Wintermute last raised a $20M Series B in January 2021.

Take a peek at our new referral reward at the bottom of this issue. Share this newsletter and receive our list of 100 smart crypto investors' wallet addresses 👇

DEAL FLOWS

Core DAO $200M Ecosystem Fund

Deal flows remains strong in the past week 🤝 — we saw $375M+ in deals.

Core DAO $200M Ecosystem Fund: Partnering with Bitget and MEXC, Core DAO has announced a $200M ecosystem fund to attract developers and fund new decentralized applications on its chain.

  • Both Bitget and MEXC are crypto exchanges.

  • MEXC and Bitget combined have more than 18 million users.

  • Unlike traditional grant-based systems, projects will only be rewarded by the ecosystem fund if they hit agreed-upon benchmarks.

Deal flows in the past week:

QUICK BITES

  • MiCA approved by EU parliament.

  • Coinbase gets Bermuda license, plans global expansion.

  • Deribit announces zero-fee spot trading.

  • Gemini expands to Asia-Pacific, opens up office in India.

  • Societe Generale introduces Euro stablecoin on Ethereum.

  • TransUnion announces crypto lending credit scores.

  • a16z announces its Optimism-based rollup client.

  • Sotheby’s prepares to sell 3AC’s liquidated NFTs.

  • Do Kwon charged with using false passport in Montenegro.

  • Tether minted $1B in USDT on Ethereum.

  • Flashbots introduces MEV-share protocol.

MEME & NOTEWORTHY READS

  • Arthur Hayes’ read on exit liquidity.

  • Paradigm’s read on SEC unfit disclosure for crypto.

  • Delphi Labs’ read on BORG: a new cryptolegal framework for DAO.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.