Digital asset manager Monochrome valued at $15M following Series A

Samson Mow, Charlie Lee, Wei Zhou and Kain Warwick were the main contributors to the Monochrome private sale, which concluded last week.

Australian digital asset manager Monochrome has concluded a $1.8 million Series A fundraiser led by some of crypto’s most influential entrepreneurs, underscoring the growing potential of institutional-grade crypto-asset solutions. 

The cash injection will be used by Monochrome to develop new products specializing in Bitcoin (BTC) and other digital assets, the company said. The Series A was co-led by Litecoin creator Charlie Lee, Blockstream chief strategy officer Samson Mow, former Binance CFO Wei Zhou and Kain Warwick, the founder of Blueshyft and DeFi protocol Synthetix. Following the raise, Monochrome’s total valuation was estimated to be worth roughly $15 million.

Monochrome was launched earlier this year by Jeff Yew, the former chief executive of Binance Australia, to provide an institutional onramp to cryptocurrency investing. The company is perhaps best known for the Monochrome Bitcoin Fund, a capital growth vehicle for wholesale investors. The fund targets a near 100% allocation to physical Bitcoin, which is custodied by U.S. trust company BitGo Trust.

Wei Zhou described Monochrome as Australia’s “leading investment firm specializing in regulated access into digital assets,” underscoring the country’s “progressive regulatory stance” towards cryptocurrency.

Like other advanced industrialized nations, Australia’s cryptocurrency regulations are still in their nascent stages. While the country does not recognize crypto as money, digital asset trading is legal in the country and is subject to Anti-Money Laundering and Counter-Terrorism Financing regulations. As Cointelegraph reported, Australia’s financial regulator recently warned citizens against using unregistered cryptocurrency businesses.

Related: Australian crypto businesses tell Senate inquiry about being de-banked up to 91 times

Monochrome, like other crypto-focused asset managers, is targeting institutional investors for inclusion in the digital-asset economy. Demand for crypto among institutional players appears to be growing, as evidenced by the large inflows into Grayscale and CoinShares products, among others. Surveys of institutional investors also reveal that a large percentage of wealth managers are planning to buy crypto investments or increase their exposure to the assets.

Related: Franklin Templeton seeks experts for Bitcoin trading and crypto research

With Bitcoin standing the test of time, more investors are likely to seek out exposure to digital assets in pursuit of broader macroeconomic objectives. Financial advisers could lead the charge now that crypto investing has been significantly de-risked from a career reputation standpoint.

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Stanford researcher-led Pledge raises $3M for decentralized lending protocol

Researchers from Stanford University and U.C. Berkeley contributed to the development of the crypto-asset lending platform.

Decentralized lending protocol Pledge has secured $3 million in investments for its cross-chain ecosystem focused on long-term financing, highlighting continued innovation in the DeFi sector. 

The investment round was led by DHVC, a Palo Alto-based venture capital firm, with additional participation from U.C. Berkeley professor Gary LaBlanc and Stanford University community members Ray Wong and Torsten Wendl. The raise will support Pledge’s mission to become a premier crypto-asset lending platform that eventually paves the way for tokenized real-world financial assets.

Pledge was created by a group of blockchain-focused researchers at Stanford University, including professor David Tse, Nicole Chang, Ray Wong and Torsten Wendl. Aforementioned professor Gary LaBlanc also contributed to the protocol.

Utilizing Binance Smart Chain, Pledge aims to facilitate long-term financing for crypto holders, something the researchers say has yet to be addressed in the industry. The protocol achieves this goal by allowing users to diversify their portfolios with non-crypto assets without being exposed to interest-rate volatility.

The protocol is powered by Pledge Tokens, or PLGR, which have a total supply of 3 billion. No market data is currently available for PLGR.

DeFi lending markets have exploded in popularity this year, attracting an influx of new users on the promise of higher yields and increased access to new markets. While Aave dominates the DeFi lending market, several protocols have launched over the past year, each one providing its own value proposition.

Related: DeFi attracts 2.91M Ethereum addresses, according to ConsenSys

Currently, just under $44 billion in total value has been locked into DeFi lending markets, according to industry data. That accounts for just over half of the total decentralized finance market.

DeFi’s growth has attracted unwanted attention from regulators who are growing more concerned about investor protections and whether certain assets fall under federal security laws. As Cointelegraph recently reported, the United States Securities and Exchange Commission has warned cryptocurrency exchange Coinbase that its proposed yield program violates securities laws.

Related: SEC vs. Coinbase: Alex Mashinsky says Celsius will have to ‘wait and see’ on fallout

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Former CFTC brass joins Andreessen Horowitz as an advisor

The company has brought former United States CFTC commissioner Brian Quintenz aboard its operation.

Crypto regulation has become an increasingly relevant topic over the past several years. To address these legal ins and outs amid the ever-changing regulatory waters, VC firm Andreessen Horowitz has called upon a previous leader of the United States Commodity Futures Trading Commission’s, or CFTC, to join its team.

“As part of our larger effort to make sure we have a world-class support system in place when it comes to policy and regulatory matters, I’m thrilled to announce that Brian Quintenz, a former Commissioner of the Commodity Futures Trading Commission, is joining as an advisory partner on the crypto team,” Andreessen Horowitz general partner Katie Haun wrote in a Thursday announcement on the a16z website.

The past year in particular has seen significant regulatory talk within the U.S. and abroad. In December 2020, the U.S. Treasury aimed to increase self-hosted crypto asset wallet surveillance and more recently, the U.S. infrastructure bill included terminology that could put considerable strain on the growing crypto space. Other countries have also made various regulatory moves, evident in their actions against digital asset exchange Binance.

Andreessen Horowitz seems to have recognized the present regulatory tune of the crypto industry and desired to provide support for the entities in its portfolio. “Our portfolio projects are innovating in ways previously unimagined, and so our investment in them must be more than just financial — we seek to provide them with a full suite of resources on their path to success,” Haun noted in the post.

The CFTC and the U.S. Securities and Exchange Commission, or SEC, are two regulatory agencies often part of the conversation whenever legal guidelines intersect with crypto. Explaining the importance of having a previous regulatory head on hand, Haun wrote:

“The CFTC plays a critical role as a federal regulator with jurisdiction over digital currencies, utility tokens, and other non-security commodities and Brian has long stood out as an innovative thinker in the crypto and DeFi space. He understands both how crypto technology works and how the CFTC thinks about the issue. His ability to translate between the two will be central to the success of a16z Crypto’s policy program and our portfolio companies.”

Other former U.S. government brass has also joined different crypto-involved outfits, such as Jay Clayton, who previously led the SEC as chairman. 

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Shanghai Man: China declares victory over crypto — Is this the end of the crackdown?

This weekly roundup of news from Mainland China, Taiwan, and Hong Kong attempts to curate the industrys most important news, including influential projects, changes in the regulatory landscape, and enterprise blockchain integrations.

Victory for the regulators

After a tumultuous summer of crackdowns, the Chinese regulators are declaring their victory in eliminating illegal cryptocurrency trading activities in the country. This revelation came in the outlook section of the “China Financial Stability Report 2021” released by the People’s Bank of China on September 3.

In the section titled Major Achievements in the Battle to Prevent and Defuse Major Financial Risks, it emphasizes that regulatory work in internet asset management, equity-based crowdfunding, internet insurance, virtual currency trading, online foreign exchange trading, and other areas has been basically completed.

The lengthy report from the PBOC declares victory on the crackdown on digital assets. Source: http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/4332768/2021090315580868236.pdf

While this might sound like a giant negative for the industry, most projects and companies in China are now breathing a sigh of relief. The end of the crackdown means that companies can have a little more breathing room to operate without fear of legal action.

Chinas public blockchain industry, or whats left of it, will no longer have to exist in the shadows. Theres also hope that upcoming editions of Shanghai Mans columns will feature more discussion about development and innovation, and less about crackdowns.

 

 

Most of the damage from regulators impacted the mining space, although exchanges and brokers are definitely shifting away from China long-term. Players like ByBit and Amber have already announced they dont accept Chinese users, which might be a trend going forward if the risks of doing business in China dont balance out with the rewards. Bigger players like Binance and FTX will have much bigger decisions to make, but at the moment, arent shying away from onboarding and servicing Chinese users.

From Sichuan to San Antonio

After winding down operations in China, many large mining companies began seeking greener pastures overseas. Since Texas governor Greg Abbot tweeted that Texas would become a crypto leader, many cryptocurrency mining companies have moved to the Lone Star state in search of regulatory stability.

 

 

Bitmain, the largest mining manufacturer in the world, has a facility in Rockdale, Texas. Rockdale is a town with less than 6,000 people, a far cry from the 21 million people that populate its home in Beijing. Incidentally, Bitmain is also deploying $62 million worth of hardware into the state of Georgia.

 

 

File:U.S. Route 79 is main street of Rockdale, TX IMG 2255.JPG - Wikimedia Commons
This quiet town in Texas is now home to a large Bitcoin mining facility. (Source: Wikimedia Commons)

 

Shenzhen-based BIT Mining is pumping in $26 million to build a data center in Texas as well. It joins BlockCap, Riot Blockchain, and other mining companies already in the area. All these businesses will be buoyed by the news that state legislators have signed Texas House Bills 4474 and 1576, legalizing cryptocurrencies under commercial laws.

Texas is now the fourth US state to recognize the status of digital assets, giving investors and companies clarity that is sorely lacking in China. Just this summer alone, different regulatory bodies within China have flip-flopped on the legal status of cryptocurrencies. This is causing a weakening belief in the sustainability of the Chinese market and should push even more companies abroad.

One country, two regulators

An executive for Hong Kongs Securities and Futures Commission believes the recent number of fraud cases points to a need for stricter regulation. The special administrative region has a much looser policy towards digital assets, allowing exchanges like FTX, Bitfinex, and other Fintech companies to set up shop.

Hong Kong has always been seen as a bridge between corporations and the robust Chinese market, although in recent years, that dynamic is starting to reverse. With tighter rules and higher uncertainty in Hong Kong, Singapore is enjoying a lot more growth in the cryptocurrency space, with a number of high-profile industry players taking up residency there.

Non-fungible trends

The overall trend of NFTs hasnt been lost on the Chinese market. OKExChain launched its OKExNFT marketplace on September 2, joining the likes of Binance and FTX who have already launched similar platforms.

While not possessed with the most creative naming team, it does house a number of Loot-lookalike NFTs known as Root, aimed at grabbing the NFT and GameFi market. Chinas gaming and trading markets, in the past, have been very active, making this a logical move. Whether OKExChain can match the success of other exchange sidechains remains to be seen.

Steph Currys decision to join FTX as an ambassador received mixed reviews as some pointed out that the NBA star, known in China for his playful personality, had matured into a master of business.

 

OKExNFT Marketplace launched this week, with a small GameFi offering.

 

 

 

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dYdX exchange releases governance token, making its airdrop worth up to $100K

The DYDX governance token becomes the latest airdrop to surpass $100,000 for the most active users, and the DEX’s transaction volumes highlight the rising popularity of layer-2 platforms.

Airdrops have been a fan-favorite in the cryptocurrency ecosystem for years because they offer projects a way to reward early adopters and increase token distribution.

The latest project to surprise its community of supporters with retroactive rewards for its newly minted token is dYdX, a non-custodial decentralized derivatives exchange that operates on a layer-2 version of the Ethereum (ETH) network.

Data from CoinGecko shows that on its first day of trading live in the markets, DYDX is trading at a price of $10.28 at the time of writing after hitting an intra-day high at $14.24.

DYDX/USD 5-min chart. Source: CoinGecko

The number of tokens received by each user was determined by their previous trading actively on the platform, with the lowest tier user receiving 310 tokens for trading at least $1 on the exchange, and the highest tier user earning 9,529 tokens for trading volumes exceeding $1 million. 

Airdrop token distribution. Source: dYdX Foundation

At the daily high of $14.24, the airdrop was worth between $4,414 and $135,692 with the average user who traded between $1,000 and $10,000 in value on the platform receiving 1,163 DYDX worth $16,561.

Related: Ethereum layer-twos reportedly processing more transactions than Bitcoin

The ongoing shift to layer-two solutions

The retroactive ‘release’ of the DYDX governance token marks a big step for the protocol as it embarks on its path to becoming a fully decentralized, community-governed platform. It is and another sign of a larger shift by a growing number of projects shifting to layer-two solutions in order to operate in a lower fee environment.

Many blockchain projects are migrating to various cross-chain and layer-two solutions like Polygon and dYdX was actually one of the first decentralized exchanges to announce that it would launch on StarkWare, a layer-two solution it developed in conjunction with StarkEx.

According to data from dYdX, at the close of the first mining epoch, there were 32,700 DYDX holders and the platform had transacted $13.8 billion in monthly trading volume and $141 million in market-maker capital has been staked. 

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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