Ripple $125M Penalty Win: A New Legal Precedent?

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Good Morning.

It is clear to me that crypto is now just one large range-bound market between $50k-70k BTC price. There’s a trade to be made if we can conclusively close above $60k but frankly, this price action has been horrendous for altcoins.

Just a reminder to focus on the edge that you have, wait until we have certainty post the US election season, and quadruple down on building instead.

-M

In Today's Email:

• What Matters: FTX & Alameda $12B settlement 💸 

• Founders Highlight: Igor of Blockscout 🔍️ 

• Deal Flow: Vessel’s $10M seed round 💰️ 

You read and share. We listen and improve. Send us feedback at [email protected].

TOGETHER WITH

Irys: The First Programmable Datachain

Irys came out of stealth a week ago — it is the first programmable datachain that provides solutions for permanent and scalable data with precise origin attribution. Hear more about Irys directly from its founder below.

Irys is a friend of Launchy — this is not a sponsored segment.

WHAT MATTERS

FTX and Alameda's $12.7B Settlement with CFTC

State of play: Judge Peter Castel has approved a $12.7B settlement for FTX and Alameda Research to repay FTX creditors as part of an agreement with the US CFTC.

• The CFTC did not seek a civil monetary penalty, allowing the entire $12.7B to go directly to FTX creditors.

• FTX and Alameda agreed to repay $8.7B to defrauded investors, plus an additional $4B in disgorgement.

• The order permanently bans FTX and Alameda Research from engaging in digital asset transactions and buying or selling digital assets on behalf of third parties.

Why it Matters: Many creditors prefer a crypto payout, considering the market’s 150% increase since FTX filed for Chapter 11 protection. This could create another massive selling pressure in the future.

• Creditors have until Aug. 16 to vote on their preference, with a final decision by Judge John Dorsey expected on Oct. 7.

For builders and investors: The sooner we get over all of the shadows of the past (Mt. Gox, Jump liquidation, FTX, etc.), the better out industry will be.

BUILDER-INVESTOR HIGHLIGHT

Igor Barinov of Blockscout

Intro: Igor Barinov is the Founder and CEO of Blockscout, an open-source blockchain explorer that has integrated more than 600 chains.

Previous background: Igor is a seasoned engineer, he has ~13 years of experience working in the IT field including the role of a CTO at POA Network. He also founded two startups during that time.

The big idea: Igor through Blockscout aims to provide much-needed transparency and a more complete alternative to the existing blockchain explorer infrastructure.

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

Ripple v SEC’s $125M Penalty

State of play: On August 7, Judge Analisa Torres ordered Ripple Labs to pay a $125M civil penalty and “permanently restrained and enjoined” the firm from violating US securities laws in a case brought by the SEC.

• Ripple is ordered to pay the SEC within 30 days.

• The SEC sought a $2B penalty, while Ripple requested a maximum of $10M.

• The Court finds that Ripple violated Section 5 of the Securities Act in their 1,278 transactions.

• Ripple CEO, Brad Garlinghouse, claimed the ruling as a victory for Ripple, the crypto industry, and the rule of law as the penalty demanded by the SEC is reduced by ~94%.

• Garlinghouse also said that “the SEC’s headwinds against the whole of the XRP community are gone.”

DEAL FLOWS

Vessel’s $10M Seed Round

Deal flows slowed down this week, we saw $67M+ in deals 💼 

Vessel has secured $10M in a seed round from Sequoia Capital, Scroll co-founders, Avalanche and Algorand Foundations, IMO Ventures, Folius Ventures, Incuba Alpha, and notable angel investors.

• Vessel is a ZK order book exchange.

• The funds will be used to integrate CEX efficiency with DEX transparency, enhance liquidity efficiency, and develop advanced ZKP solutions for DeFi.

• Vessel planned to launch perpetual trading in Q4’24.

Deal flows in the past week:

• Lync, $1.5M Pre-Seed Round

• Payman, $3M Pre-Seed Round

• Blockscout, $3M Seed Round

• Curio, $5.7M Seed Round

• Pentagon Games, $6M Seed Round

• Vessel, $10M Seed Round

• Moonveil, $9M Pre-Series A

• Cartridge, $7.5M Series A

• Andrena, $18M Series A+

• ZOTH, $4M Strategic Round

• Solayer, Undisclosed $ Private Round

QUICK BITES

• Jito sees record Solana validator tips.

• Solana ETFs are now a thing—in Brazil.

• Donald Trump Jr. teases a new DeFi project.

• UK Court freezes assets of OneCoin's 'Cryptoqueen'.

• Kamala Harris ties with Trump election odds on Polymarket.

• Franklin Templeton launches on-chain MM fund on Arbitrum.

• Fed orders crypto-friendly Customers Bank to limit crypto risks.

• Crypto executives meet White House officials to discuss policy.

• Solana devs address a critical vulnerability with a coordinated patch.

• WazirX to undo all trades following a $230M hack-related withdrawal.

NOTEWORTHY READS

• Panadol girl’s read on token migration 101.

• a16z crypto’s read on structuring token right.

• Arthur Hayes’ read on the JPY carry trade unwinding.

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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.