Germany Readies 3,000 BTC for Sale

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Good Morning.

I’m heading down to ETHCC while crying at my portfolio. Why is it the case that price always dumps around conference season? Maybe it’s a tell tale sign to stop with the exuberance while crypto is still trying to find PMF for the broader masses. Anyway, I digress.

In Today's Email:

• What Matters: Germany BTC selling 🇩🇪 

• Founders Highlight: Misha & Algys of Symbiotic 👾

• Deal Flow: Sentient’s $85M seed round 🤝 

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WHAT MATTERS

German Government Transfers 3,000 BTC

State of play: The German government transferred an additional 3,000 Bitcoin (BTC), worth around $160M at the time of writing, to several addresses including exchanges, according to Arkham data.

• 1,700 BTC were moved to a wallet starting with “139Po,” 500 BTC to Bitstamp and 400 BTC each to Coinbase and Kraken.

• On Tuesday, the government transferred 282.74 BTC to exchange addresses. It has transferred over $300M in Bitcoin.

• In total, the government is holding 42,274 BTC worth around $2.3B.

• Germany ranks among the top nation-state holders of Bitcoin, trailing the US (213,246 BTC), China (190,000 BTC), and the UK (61,000 BTC).

• In January this year, German authorities seized 50,000 Bitcoin from a German pirating operation “Movie2k”.

Justin Sun, in his usual fashion, offered the German government to purchase all its BTC off-market to minimize the impact on the market. Sun has a history of floating offers for deals that don't materialize:

• Last year, Sun also said that he wanted to buy Credit Suisse to turn it into a "crypto-friendly" bank.

• In the same year, Sun also said that he was willing to spend up to $1B for assets belonging to Digital Currency Group.

• The year before, Sun said that he was ready to spend up to $5B on struggling crypto firms.

Why it Matters: It is not just Germany; the US has also moved its Ether seized from crypto mining fraud, signaling their potential intention to sell the assets.

• US government wallets transferred 3,375 Ether from seized assets to an unknown address on July 1st.

• Creditors of the bankrupt Mt. Gox exchange also will start receiving $9.2B in Bitcoin and Bitcoin Cash in July.

• The US transferred all the seized Ether from the arrest; it is possible that Germany will also transfer all 50,000 BTC seized from “Movie2k”.

For builders and investors: Flows still trump everything in crypto — any large blocks of selling from governments and Mt Gox creditors will exacerbate the downside pressure in the short-term.

BUILDER-INVESTOR HIGHLIGHT

Misha Putiatin & Algys Levlev of Symbiotic

Intro: Misha Putiatin & Algys Levlev are the co-founders of Symbiotic, a generalized, permissionless protocol providing shared security through restaking.

• Symbiotic raised $5.8M from Paradigm and Cyber.Fund. In less than a month, it reached $1B TVL.

Previous background: Prior to Symbiotic, Both Misha and Algys founded and led Statemind, a top auditor with a close working relationship with Lido (i.e., on their V2 audit), Curve, and InstaDapp.

• Before Statemind, they worked together in a smart contract audit company called MixBytes.

The big idea: Like EigenLayer, Symbiotic aims to resolve network security challenges by reallocating existing staking capital and infrastructure. Symbiotic will also challenge EigenLayer's dominance in the restaking sector.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 500 crypto VC individuals 👇

INSIGHTS

Bittensor’s $8M Exploit Post-Mortem

State of play: The Opentensor Foundation has pinpointed a malicious package upload as the cause of an $8M exploit affecting Bittensor wallets, according to their post-mortem report.

• The attack on Bittensor wallets started at 7:06 p.m. UTC on July 2, with the attacker draining funds to their own wallet.

• By 7:26 p.m., the foundation noticed unusual transfer volumes.

• By 7:41 p.m., the foundation placed network validators behind a firewall in "safe mode," halting transactions and blocking new connections to investigate the incident.

The attack was traced to a malicious package uploaded to PyPi Package Manager version 6.12.2. The package posed as a legitimate Bittensor library but was designed to steal private keys.

• Those using third-party applications or not performing these actions likely weren't impacted.

• The blockchain itself and the Bittensor protocol remain secure and uncompromised, according to the foundation.

• The foundation removed the malicious 6.12.2 package from PyPi and reviewed Bittensor’s GitHub code.

The foundation collaborates with crypto exchanges and the Bittensor community to trace the attacker and recover lost funds.

• The foundation advises users to create new wallets and upgrade to the latest Bittensor version once the blockchain resumes.

DEAL FLOWS

Sentient’s $85M Mega Seed Round

Deal flows soared this week, we saw $225M+ in deals 💼 

Sentient, an AI development platform with Polygon co-founder Sandeep Nailwal as a key contributor, raised $85M in seed funding co-led by Peter Thiel's Founders Fund, Pantera Capital and Framework Ventures.

• Other investors in the round included Ethereal Ventures, Robot Ventures, Symbolic Capital, Delphi Ventures, Hack VC, Arrington Capital, HashKey Capital, Canonical Crypto and Foresight Ventures.

• Sentient is developing open-source AI models through community contributions, addressing the centralization and ethical concerns of AI.

• Nailwal collaborates with other core contributors: Princeton University's Pramod Viswanath and Indian Institute of Science's Himanshu Tyagi, both engineering professors.

• Sensys, a startup founded by Kenzi Wang, the co-founder of Symbolic Capital, will support startups within the Sentient ecosystem.

• Wang, Viswanath, Nailwal, and Tyagi were united by EigenLayer’s Sreeram Kannan, who also served as Sentient's advisor.

• Sentient will launch “campaigns for contributors”, offering rewards such as co-ownership of AI models and future usage benefits.

Deal flows in the past week:

• Ethos Network, $1.75M Pre-Seed Round

• Compute Labs, $3M Pre-Seed Round

• Plaza Finance, Undisclosed $ Pre-Seed Round

• Mamori, $5M Seed Round

• QED, $6M Seed Round

• OpenLedger, $8M Seed Round

• SendBlock, $8.2M Seed Round

• Astria, $12.5M Seed Round

• Pi Squared, $12.5M Seed Round

• Prodia, $15M Seed Round

• Lombard, $16M Seed Round

• Sentient, $85M Seed Round

• RedStone, $15M Series A

• Nubila Network, $2.5M Private Round

• CARV, $35M Node Sale

QUICK BITES

• BitMEX launches a new memecoin basket index.

• FriendTech says the native token will stay on Base.

• Bybit sees its market share soar since FTX's fallout.

• The crypto market sees $665M in daily liquidations.

• Bittensor identifies vulnerability behind $8M exploit.

• Symbiotic surpasses $1B in deposits in under a month.

• South Korea unveils real-time monitoring for crypto fraud.

• Mt Gox moves nearly 47,229 BTC ahead of the $9B payout.

• German government transfers an additional $175M in BTC.

• Coinbase argues Gensler’s email is an ‘appropriate source of discovery.’

NOTEWORTHY READS

• Zee Prime’s read on DeSec.

• Ignas’s read on bullish catalysts.

• Dirt Roads’ read on Ethena’s odyssey.

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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.