White Star Capital Digital Asset Fund - newsletter #47
Our newest investment + crypto industry holds up the US infrastructure bill đ
Our investment in Liquality + the latest on the US infrastructure bill
We are thrilled to announce our latest investment in Liquality, a multi-blockchain user-owned crypto wallet that allows users to interact with any cryptocurrency asset and application. Read more about our investment here.
This week, the blockchain industry was working with Senators and their staffers to change proposed language in the US infrastructure bill that would unfairly treat certain ecosystem participants with a broad (inaccurate) definition. The bill's process, with the Senate version incubating behind closed doors with a bipartisan group, has proved controversial, especially for the crypto community. It also proved how few policymakers know about how blockchain technology functions â with the exception of a few key Senators that spearheaded amendments clarifying the language.
Two amendments looking to correct this broad definition emerged over the past week, eventually consolidating into a compromise that included Treasury support. Due to the bill's truncated process, they didn't get a traditional vote. Senator Pat Toomey instead presented the consolidated amendment to the Senate for unanimous consent, which required no senator to object. Senator Richard Shelby of Alabama ultimately sank the amendment out of a desire to see his own $50bn amendment, to add military spending, enter the bill.
The Senate passed the bill on August 10, with a final vote tally of 69-30 (one abstention). The language that is now passed would identify anyone who provides "any service effectuating transfers of digital assets on behalf of another person" as a broker for the purposes of IRS reporting. The crypto industry immediately voiced concerns that beyond the target cryptocurrency exchanges, that language would potentially render such parties as miners, stakers, node operators, and software developers responsible for reporting tax information of crypto users. That is not technologically feasible.
The bill still needs to pass in the House of Representatives, which is on recess until September. Given the support the blockchain community received from several Senators, we expect the controversial language to be amended to match a more technologically correct nature.
đŠ White Star & Portfolio Spotlight
ConsenSys-incubated crypto wallet Liquality raises $7m in seed funding
The round was led by Hashed, Galaxy Digital, White Star Capital with participation from, Accomplice, Coinbase Ventures, Alameda Research, and others.
EthCC recap panel featuring Mounir from ParaSwap
Alethea AI is partnering with Alien Worlds to bring NFTs to life
đŠ Enterprises & Institutions
Victory Capital applies to SEC for crypto ETF
Victory Capital revealed its plans to enter the crypto market in June through a private fund tracking the NCI aimed at accredited investors.
JPMorgan launches in-house bitcoin fund for private bank clients
The mega-bank has started pitching Private Bank clients on a passive bitcoin fund in partnership with NYDIG.
Invesco files with SEC for bitcoin strategy ETF
The ETH will seek to have full exposure to bitcoin futures and at times may have exposure to other investment vehicles, including bitcoin ETFs listed outside the U.S. and investment trusts such as Grayscale Bitcoin Trust.
Market making giant Virtu Financial is now active on Coinbase and Gemini
Virtu Financial, a multi-billion trading firm, has made a big move into the crypto market, announcing during its second-quarter earnings that it has been market making on major crypto venues.
Circle wants to become a bank so it relies less on third-party partners
Circle â the fintech company behind stablecoin US dollar coin (USDC) â dropped a regulatory filing that reveals its ambitions to become a U.S. national bank.
VanEck tries again for bitcoin strategy ETF with SEC
VanEck unsuccessfully tried to list a similar fund in 2017.
Venmo launches crypto cashback for credit cards
The company will allow Venmo credit card users to automatically purchase cryptocurrency using cash back rewards earned through credit card purchases,
âïž Government & Regulation
Beijing subway has fully integrated China's central bank digital currency with its payment ecosystem
According to the Beijing railway, China's digital yuan, also known as the e-CNY, is now fully supported as a payment or balance top-up option across 428 subway stations in 24 lines.
Newly-filed legislation in Uruguay aims to regulate digital assets
Juan Sartori, a senator of Uruguay since 2020, has introduced a bill that would legalize digital assets within the country, allow businesses in Uruguay to accept crypto for payments, and provide a regulatory framework for incorporating crypto into its financial system.
French asset manager wins approval to launch bitcoin ETF in EU
French asset manager Melanion Capital won regulatory approval to launch an exchange-traded fund (ETF) tracking the price of bitcoin for investors across the European Union.
đ° Funding & Exits
Nine Chronicles raises $2.6m growth round led by Animoca Brands
Growth partners joining this round include Animoca Brands, Divergence Ventures, IDEO CoLab, Sfermion, Hypersphere Ventures, SkyVision Capital and notable angels such as Axie Infinity Co-founder Jeffrey Zirlin and Aave CEO Stani Kulechov.
Coinbase Ventures, Gemini join $6m seed round for crypto platform Onramp Invest
The round was backed by notable investors, including Coinbase Ventures, Gemini Frontier Fund, Galaxy Digital, Galaxy Fund Management, Ritholtz Wealth Management, WisdomTree, Fox Ventures, and Eterna Capital.
DeFi platform Krystal raises $6.6m in seed funding
The round was led by crypto venture firm Hashed, with participation from Signum Capital, BlockTower, Crypto.com, Arrington Capital, DeFi Alliance, Coin98, and others.
Horizen Labs raises $7m in seed funding round
Kenetic Capital led the funding, which also included Digital Currency Group and Liberty City.
Rothschild-founded RTI Capital invests in crypto platform Aspen Digital
Aspen Digital, a crypto investment platform for asset managers, institutions, and other professional investors, has raised $8.8m in a pre-Series A funding round.
Indexing protocol Nakji Network raises $8.8m
Animoca Brands, CMS Holdings, Primitive Ventures, One Block, Panony, and others backed the round.
a16z, BlockTower, Alameda back $12.5m round for TrustToken
The round shows investorsâ growing interest in DeFi. But while most of the loans in this market are secured with cryptocurrency pledged by borrowers, TrueFi lending does not require collateral.
NFT marketplace MakersPlace secures $30m in Series A round
The round was led by Bessemer Venture Partners and Pantera Capital with participants including Uncork Capital, Coinbase Ventures, and Sony Music Entertainment.
Financier Alan Howard owns 5.8% of German crypto asset management firm Iconic Holding
Alan Howard, the co-founder of macro hedge fund Brevan Howard, has invested in German crypto asset manager Iconic Holding.
Steve Cohen's Point72 makes first crypto venture investment, leads Messari's $21m raise
Led by DCG and CoinDesk alum Ryan Selkis, Messari operates in the crowded market for crypto data and research. As part of the raise, the firm has raised $21m at a post-money valuation close to $100m.
Indian crypto exchange CoinDCX becomes a unicorn with latest $90m funding
B Capital, founded by Facebook co-founder Eduardo Saverin, led CoinDCX's Series C round. Existing investors Coinbase Ventures, Polychain Capital, Block.one, Jump Capital, and others also backed the round.
Decentralized wireless network Helium raises $111m in token sale led by a16z
Also participating were 10T, Ribbit Capital, Alameda Research and Multicoin Capital.
Gaming community pledges $203m in Ember Swordâs virtual NFT land sale
Nearly 35,000 people submitted applications to purchase 6,000 virtual plots.
Crypto trading startup FalconX achieves unicorn status with latest raise
FalconX, an institutionally minded cryptocurrency trading desk, reached unicorn status with a $210m series C funding round led in part by Tiger Global.
Tron Foundation launches $300m fund to invest in GameFi projects
The fundâs goal is to support developers and create GameFi projects by building decentralized finance (DeFi) content
Gemini acqui-hires DeFi platform Guesser
Gemini said the acqui-hire is aimed at growing the adoption of its Gemini dollar (GUSD) stablecoin and increasing its presence in the decentralized finance (DeFi) ecosystem.
Coinbase is acquiring crypto data aggregator Zabo
Crypto exchange operator Coinbase has agreed to acquire Zabo â a crypto data aggregator that enables fintechs and financial services firms to connect with crypto exchanges, wallets, and protocols.
đ Project Launches & Updates
Lionel Messi NFT collection set for launch
Lionel Messi will be celebrated in his first authenticated NFT collection, "The Messiverse."
NASCAR links partnership with the startup behind a blockchain-based digital horse racing game
The two companies are still finalizing details, but to begin, Virtually Human Studio will work with NASCAR to create NASCAR-branded digital horses on its racing platform.
đ„ Other Bits We're Excited About
FTX strikes 7-year deal with âLeague of Legendsâ Riot Games
Riot Games said it was the largest sponsorship agreement the League of Legends creator has signed for an esports tournament to date.
Ethereum network burns $12m in ETH in first 24 hours since EIP-1559
Since the Ethereum network's latest upgrade, dubbed London â which introduced a transaction fee burning mechanism â the network has burned 4,600 ETH in the first 24 hours, worth around $12m.
Christie's to hold first-ever sale of Meebits and Bored Ape Yacht Club NFTs
The auction begins on September 17 at 2:00 PM HKT (September 18, 2:00 a.m. ET) and ends September 28 at 2:00 p.m. HKT (September 29, 2:00 a.m. ET).