More DCG Problems

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Good Morning,

It’s conference season next week with Permissionless in the US and Token 2049 in Singapore. Historically, the market has always dumped post these events as liquidity might be thinner due to traders being away from their desks.

Please don’t short the market while we’re away.

In Today's Email:

• What Matters: DCG problems 😟

• Founders Highlight: Ameen of SpankChain ⛓️

• Deal Flows: Story Protocol $54M Series A 💰

NOTEWORTHY READS

• David Phelps’ read on the proto-app thesis.

• United Nations’ read on crypto scams and trafficking in Southeast Asia.

• Rodrigo Seira’s read on the CFTC action towards 3 DeFi protocols.

BROUGHT TO YOU BY

NEAR Horizon

WHAT MATTERS

Genesis Sues DCG Over Unpaid Bitcoin Loans

State of play: Genesis has filed a lawsuit against Digital Currency Group (DCG) over unpaid multiple loans totaling hundreds of millions of dollars, which were due in May.

• Genesis loaned more than 18K Bitcoins to DCG in 2022.

• The debt was converted into a fixed-term loan with a maturity date of May 11.

• Genesis' lawyers mentioned that in November 2022, Genesis and DCG entered into an updated loan agreement.

• DCG and Genesis are also currently embroiled in a legal dispute with Gemini.

• Earlier this year, the Department of Justice investigated transfers between DCG and Genesis.

Why it matters: The outcome of this lawsuit will affect the crypto space tremendously.

• DCG has not filed for bankruptcy and holds additional assets, including the crypto news site CoinDesk and digital asset manager Grayscale.

• CoinDesk is about to be sold in a $125M deal.

• Grayscale is DCG’s money maker, which won’t be as lucrative anymore once it converts its GBTC to a spot Bitcoin ETF.

For builders and investors: It seems likely that DCG must sell some assets some time in the future. That selling pressure combined with FTX’s selling pressure indicate that it will be some time before the market rebounded in any significant way.

BUILDER-INVESTOR HIGHLIGHT

Ameen Soleimani, Co-Founder and CEO of Spankchain

Ameen Soleimani is the Co-Founder and CEO of Spankchain, an adult entertainment website and cryptocurrency exchange mostly used for exchanges in the sex work industry.

• Ameen recently co-authored a privacy paper titled "Blockchain Privacy and Regulatory Compliance: Striving for a Practical Balance" alongside Vitalik Buterin.

Previous backgrounds: Ameen studied Chemical Engineering at Rensselaer Polytechnic Institute from 2009-2012. He worked at ConsenSys from 2016 to 2017.

• He founded Moloch Ventures, a blockchain venture production studio, and Spankchain in 2017.

The big idea: Ameen is a notable figure in the crypto space, with involvements outside of his own firm, including at Reflexer Finance, MolochDAO, and others.

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

INSIGHTS

22 Billionaires on Crypto Rich List

A recent crypto wealth report by Henley & Partners, in partnership with New World Wealth, identifies 22 billionaires and 88,000 millionaires created by the crypto industry, amassing a total market value exceeding $1T.

• Out of the 22 billionaires generated by the crypto sector, six owe their wealth solely to Bitcoin and roughly 50% of the 88,200 millionaires originate from Bitcoin.

• The 88,200 crypto millionaires constitute a mere 0.15% of the approximately 60M millionaires worldwide, as per the latest UBS global wealth report.

• According to the report, Singapore, Switzerland, and the UAE lead the "Crypto Adoption Index," based on criteria such as public and infrastructure adoption, innovation, as well as tax and regulations.

DEAL FLOWS

Story Protocol Raises $54M+

Deal flows rebounded this week 📈 — we saw $110M+ in deals.

Story Protocol is a platform that aims to democratize IP creation through a global and extensible repository. The firm just raised $54M in funding led by a16z, along with Endeavor and Samsung Ventures.

Other deal flow news: Sino Global has rebranded itself as Ryze Labs, while Haun Ventures has brought on board private equity veteran Suzanne Kim.

Deal flows in the past week:

• Game3s.gg, $2M Seed Round

• TRLab, $5M Seed Round

• Trident Digital, $8M Seed Round

• GenTwo, $15M Series A Round

• Story Protocol, $54M Series A

• Onboard Wallet, $1.9M Strategic Round

• Socket, $5M Strategic Round

• D3 Global, $5M Unknown Round

• Brine, $16.5M Unknown Round

QUICK BITES & MEME

• Grab adds Web3 wallet to its app.

• Linus Financial settles SEC charges.

• CFTC settles charges against DeFi protocols.

• Winklevoss Claims fuel US investigation of DCG.

• Ex-FTX Exec Salame pleads guilty.

• FBI says North Korea was responsible for $41M theft on Stake.

• FASB says crypto assets should be marked at current values.

• Ant Group launches overseas blockchain brand ZAN.

• JPMorgan exploring a blockchain payment and settlement system.

• Taiwan plans to ban offshore crypto exchanges if not compliant.

• Ark Invest & 21Shares file with SEC for Spot Ether ETF.

• $500B Asset Manager Mirae taps Polygon Labs to develop Tokenized Securities Network.

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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.