SBF's $250M Christmas Present

Happy Friday folks 👋🏻 - SBF is going back to his parents' basement. Hope you're all celebrating the holiday season. We all need a bit of time away from the craziness of magic internet money. In other news, the regulatory implication of FTX shenanigans is still ongoing, with the SEC claiming that FTX Token, FTT, is a security.

How this claim plays out will by far become the most important piece of news for the future of the crypto space.

In Today's Email:

• What Matters: SBF $250M Bail 🤯

• Founders Highlight: Nichanan Kesonpat, Head of Platform at 1kx Network 👷‍♀️

• Deal Flows: Binance US shopping spree, Axelar Ecosystem Fund 🛍️

WHAT MATTERS

Sam Bankman-Fried $250M Bail

State of play: Sam Bankman-Fried has been released on a record $250M bond as he awaits trial. Assistant US Attorney Nick Roos offered up the personal recognizance bond. SBF will be under house arrest in his parents' home in Palo Alto.

• A personal recognizance bond is a written guarantee to appear in court at a later date and time. It requires signatures from SBF, his parents, and a third non-family member - whose identity is still yet to be disclosed.

• This doesn't mean that he pays $250M, or that he's walking free. It's estimated that SBF only needs to pay the 10% mark of the $250M bond as bail. The approximate sum of $25M is =collateralized by his parent's house.

People are still investigating what this actually means. Many signals that the governments will be able to go after SBF's parents' home and the third unnamed individual if SBF flees or doesn't appear in court.

Why it matters: SBF destroyed the progress that the entire crypto industry has worked on in the past few years. The regulatory implications that will emerge post-FTX will have a significant impact on the industry. This ranges from how SBF will be prosecuted, to whether the FTT token is a security, and many more.

For builders: Make sure your project is chain agnostic. Don't build in an ecosystem where everything can fall apart because of one entity. While Solana founders certainly had good intentions, their reliance on SBF's capital and ecosystem of projects hurt them really badly in this downturn.

For investors: Some cynicism is healthy. After a decade of a bull market with extremely low-interest rates, investors have an unbridled level of optimism when backing new founders. FTX was able to raise billions without audited financials through Telegram. Let that sink in. Don't cut corners when doing your due diligence.

BUILDER-INVESTOR HIGHLIGHT

Nichanan Kesonpat, Head of Platform at 1KX Network

Nichanan Kesonpat is the Head of Platform at 1KX Network, an early-stage crypto fund. The fund focuses on helping founders bootstrap token networks and achieves ecosystem growth.

What previously was recent: Nichanan graduated in Molecular and Cell Biology from the University of California, Berkeley, in 2016. After graduation, Nichanan took a career in talent acquisition for two years+ and became a Program & Community Strategy at KX Made. During her work there, she also built her first startup called Last of Ours, a project to connect the users and wildlife fund in a fun way.

• At Last of Ours, Nichanan was the Product Engineer focusing on tokenomics, blockchain integration, and full-stack development. Nichanan also got a Devcon V Scholar by the Ethereum Foundation, after which she became a ConsenSys Academy certified blockchain analyst and junior developer.

• Nichanan then began transitioning to coding-focused work. Moving forward from the startup, she built, she also became the Smart Contract Engineer at Upstate Agency and BondwithMochi.

The big idea: Right now, Nichanan is the Head of Platform at 1kx. The focus: (i) Thinking about how token network thesis applies across DeFi, gaming, web3 infra, and the broader industry in general. (ii) Helping support founders who are building towards this vision.

• Nowadays, Nichanan also writes a blog, which has become the platform for her to share educational crypto content. Nichanan is involved with women-led Web3 projects at MGD DAO and is a mentor at ConsenSys Academy.

DEAL FLOWS

Binance US-Voyager & Axelar Ecosystem Fund

Deal flows remain slow given the fear of FTX contagion and Genesis insolvency. Binance US deal in acquiring Voyager's asset is the single biggest contributor to this week's flows, amounting to 91% of funds raised this week.

• $1B+ transacted

• 10+ deals made

Binance US to acquire Voyager's Assets: Deja Vu. Taking on the previous role of FTX, Binance US has emerged as the highest bidder for bankrupt crypto lending firm Voyager's assets. Binance US will pay ~$1.02B. Voyager's users will be able to access their assets on the Binance US platform once the deal is through.

Axelar $60M Ecosystem Fund: The interchain communication protocol readies $60M to invest in startup building on top of Axelar. Participation in the fund includes 15 VC firms, notably Dragonfly Capital and DCVC.

• "To qualify for funding, projects must also safeguard digital sovereignty, security and privacy, and work to onboard masses easily without unnecessary friction between specific blockchains or tokens, noted the company."

Deal flows in the past week:

• Voyager, $1B Acquisition by Binance US

• Axelar, $60M Ecosystem Fund

• Cypherock, $1M Seed Round

• Concordex, $1.7M Seed Round

• Layer2 Labs, $3M Seed Round

• Arrakis, $4M Seed Round

• Pods, $5.6M Seed Round

• Foundation (BTC Tooling Developer), $7M Seed Round

• Revel, $7.8M Seed Round

• Pine Protocol, $3M Private Round

• Tonsnipe, $100K Unknown Round

QUICK BITES

• SEC calls FTT a security.

• Core Scientific (miner) files for bankruptcy.

• Sen. Toomey introduces a new stablecoin bill.

• Alameda's Ellison & FTX's Wang plead guilty.

• Kraken releases 'pro' product for traders.

• Bullish exchange cancels SPAC deal.

• Ankr exploit was insider's work - update.

• Wintermute plans to launch a centralized exchange

• OKX publishes a 2nd proof-of-reserves report.

• Mythical Games ($150M raise) sued former execs.

MEME & NOTEWORTHY READS

• Qiao Wang's blog on 2023 crypto startup ideas.

• @compound248's thread on Caroline Ellison & Gary Wang confessions.

• Coinbase's report on 2023 crypto market outlook.

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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.