Jamie Dimon: I’d Shut Crypto Down

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Good Morning. Jito airdrop gave $10,000 to ~10,000 wallets, BONK market cap reached PEPE’s, and the Solana rebirth continues. SBF must be in so much pain knowing that FTX could’ve been whole if he just survived for another year.

In Today's Email:

• What Matters: JPMorgan goes against crypto 🏦

• Founders Highlight: Lucas of Jito Labs 💡

• Deal Flows: Babylon $18M raise 💰

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In case you’re not aware, we’ve been doing market briefs on topical crypto news items. Check out this brief on JITO airdrop.

WHAT MATTERS

Jamie Dimon: I’d Close Crypto Down

State of play: JPM CEO Jamie Dimon says that if he had the authority, he would shut down the crypto industry — in an interaction with Senator Elizabeth Warren during the Senate Banking Committee hearing.

• Senator Elizabeth Warren, a Democrat, joined forces with Republicans and banking leaders during the hearing to criticize the crypto industry.

• Warren argues that crypto is being used by terrorists to get around the Bank Secrecy Act.

• Warren drew a contrast with the crypto market, advocating for extending the AML rules applicable to banks to digital assets—a proposal that all CEOs agreed with.

• Dimon's recent comments further contribute to his extensive history of criticizing crypto, previously calling it a "Ponzi" and a "fraud."

• Dimon, alongside industry leaders like Bank of America Corp's Brian Moynihan, assured the presence of safeguards to prevent terrorists and illegal actors from utilizing their institutions.

Why it matters: Dimon, CEOs of multibillion-dollar banks, and politicians are joining forces and creating a narrative that crypto is a danger to national security (i.e., terrorism, drug trafficking, and rogue nations).

• The US Treasury has also been seeking expanded sanctions power in crypto over illicit financing overseas.

For builders and investors: Regulatory risks remain on the table, which is why the lobbying efforts and crypto policy works are still more important than ever.

• Many also thinks that this is just Dimon’s way to play the two sides at the same time.

BUILDER-INVESTOR HIGHLIGHT

Lucas Bruder of Jito Labs

Lucas Bruder is the CEO of Jito Labs, which builds high-performance MEV infrastructure for Solana.

• Lucas alongside Zano Shermani, the CTO of Jito Labs, recently introduced a groundbreaking protocol called Stake Net, a protocol for timeless liquid staking on the Solana blockchain.

Previous backgrounds: Before establishing Jito Labs, Lucas was involved in developing control systems for self-driving bulldozers and embedded firmware at Ouster and Tesla.

• Lucas holds a degree in Electrical and Computer Engineering from Carnegie Mellon University.

The big idea: Jito Labs aims to make Solana more efficient by minimizing the negative impact of MEV on users and providing a useful liquid staking protocol.

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INSIGHTS

a16z’s 2024 List of “Big Ideas” in Crypto

a16z is sharing a list of big ideas that tech builders in the crypto space may tackle in the year ahead. Here is the list:

• New best practices for decentralization are emerging, incorporating models accommodating feature-rich applications.

• Innovative methods, like DAOs adopting Machiavellian principles, are emphasized for designing more effective decentralized governance with increased leadership accountability.

• Crypto user experience fundamentals have remained largely unchanged, prompting concerns about the complexity that exceeds what users can grasp in their initial moments with a crypto app.

• Tasks such as self-custodying secret keys, connecting wallets with dApps and navigating multiple network endpoints continue to pose challenges.

• The space needs a more open-source, modular tech stack that unlocks permissionless innovation, allows participants to specialize and incentivizes more competition.

• Decentralized, open-source crypto networks will democratize (vs. concentrate) AI innovation.

• Play to earn becomes play and earn.

• When AI becomes the game maker, crypto offers guarantees - AI agents in games must come with guarantees: that they’re based on certain models, and that those models are executed without corruption.

• The rising adoption of formal methods-inspired tools by developers and security specialists is anticipated to lead to more resilient smart contract protocols, reducing susceptibility to costly hacks.

• Heading into 2024, many of the conditions are in place for NFTs to become ubiquitous as digital brand assets.

• SNARKs (Succinct Non-interactive Arguments of Knowledge) are becoming more usable.

DEAL FLOWS

Babylon Raises $18M

Deal flows slowed down this week 📉 — we saw $70M+ in deals.

Babylon announced a $18M funding round co-led by Polychain Capital and Hack VC.

• The fresh capital will play a key role in progressing Babylon's Bitcoin Staking protocol.

• The mission is to transform the 21M bitcoins into a decentralized staking asset for the PoS economy in a trustless manner.

• Babylon is the first marketplace to offer bitcoin to the PoS world through its Bitcoin Staking Protocol.

Deal flows in the past week:

• Candlestick, $1.2M Pre-Seed Round

• Versatus Labs, $2.3M Seed Round

• Curvance, $3.6M Seed Round

• Sindri Labs, $5M Seed Round

• Ten, $7.5M Seed Round.

• Shadow, $9M Seed Round

• Babylon, $18M Series A

• Gataca, $1.41M Strategic Round

• LandX, $5M Private Round

• QANplatform, $15M Private Round

• Endless Clouds, $2.5M Strategic Round

• Carv, Undisclosed $ Strategic Round

• Pyth, Undisclosed $ Strategic Round

• Inspect, Undisclosed $ Strategic Round

• TON, Undisclosed $ from KuCoin

• SYMMIO, $1.1M OTC.

QUICK BITES

• Do Kwon will be extradited to US.

• CZ can’t return to UAE before sentencing.

• Pro-Blockchain Bill clears hurdle in US House.

• Sotheby begins first Bitcoin Ordinals nFT auction.

• Robinhood launches crypto trading app in Europe.

• Société Générale launches Euro-pegged stablecoin.

• Hong Kong Regulator blocks access to two crypto entities.

• Merit Circle DAO partners with Immutable to grow ecosystem.

• TON blockchain slows to a halt due to Ordinals-inspired activity.

• Thiel-backed One Trading to launch a new crypto trading platform.

• Bitzlato co-founder pleads guilty to processing $700M in illicit funds.

• Binance withdraws application to manage Abu Dhabi investment fund.

• Zodia Custody launches new product to connect institutional accounts.

• Terraform Labs asked judge to let jury decide if UST and LUNA are securities.

• Safe partners with Sygnum Bank and Coincover to launch crypto recovery service.

NOTEWORTHY READS

• Syncracy Capital’s read on the Solana thesis.

• Blueprints by Bridget Harris’s read on borderless payments.

• Jon Charbonneau’s read on L1s vs. L2s, Rollups vs. Integrated, General-purpose vs. App-specific.

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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.