The Winklevoss twins have a blast – TechCrunch

Welcome back to Chain reaction.

Last week, we reported on an arrest in the crypto world that made investors sweat. This week, we’re talking about tipping into the general malaise of a crypto winter.

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Crypto has had a brutal few months and yet the show goes on – metaphorically and literally for the Winklevoss twins who, despite major layoffs announced and a federal lawsuit continuing this week against their crypto exchange Gemini, have started the tour. multi-city for their cover band “Mars Junction” which plays hits from Blink 182, The killers and Rage against the machine.

The band’s billionaire singers (both immortalized by Armie Hammer in the movie The Social Network) revamped their image with a substantial bet on the bitcoin ecosystem years ago and while Gemini lags behind many rivals, the exchange reached a valuation of $7.1 billion last year, but lawsuits from investors and regulators associated with layoffs could still spell trouble.

Skyrocketing valuations were a feature of the 2021 bull run for crypto in which unicorn startups were created every week as money poured into space even as consumer interest in Web3 services seemed to grow more modestly. But as investors watch Coinbase’s public setbacks, startups that haven’t raised enough are about to see more hostile conditions present themselves.

This week, The Block and Bloomberg reported that crypto lending platform BlockFi is taking a massive haircut and aiming to raise a round to a $1 billion valuation just over a year after raising funds. fund at $3 billion.

Investors are becoming more conservative with their capital, but also becoming a little more skeptical of exit options.

For public behemoths like Coinbase, the hit to their stock price has left them scrambling, reversing a hiring spree in spades and nullifying offers to potential employees. Coinbase’s woes are likely a major signal of tough times ahead for private crypto startups that may not have raised as much lead as needed. Companies in dire need of growth capital won’t be in a good position, although venture capitalists like a16z will certainly try to keep the party going for early-stage startups with new funds devoted largely to new ventures. new bets.

The broader tech industry hasn’t seen a prolonged recession for a few decades, but crypto startups have faced many brutal “winter” spells. As a result, one would expect them to be a bit better prepared for the end of the good times…and yet, many top crypto companies are reporting that this latest crash caught them off guard.

the last module

It’s Anita here – in this week’s episode, Lucas and I unfortunately had to be the bearers of some bad news as the crypto market downturn begins to impact employees. Some of the biggest crypto companies are joining the recent wave of tech startups laying off people en masse. We talked about Coinbase’s recent decision to cancel job offers it had already made to candidates who had committed to work there, Gemini’s Decision laying off 10% of its staff, and how exactly things got so ugly so quickly.

We also talked about the new bill Senators Cynthia Lummis and Kirsten Gillbrand this week outlined what could provide long-awaited regulatory clarity for crypto, explaining why we believe this is a long-term win for companies building in space. and investors holding digital assets.

Sriram Krishnan, general partner of a16z’s crypto team (and co-host of “The Good Time Show”), joined us to shed some light on some of his recent Twitter beefs and his experience. as an executive in some of the biggest social media. companies informs its approach to consumer investment on the web3.

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follow the money

Where startup money is moving in the crypto world:

  1. Mobile investment platform Delphia raised a $60 million Series A led by Multicoin Capital.
  2. Calaxiaa Web3 social marketplace, secured $26 million in strategic funding co-led by Animoca Brands and the HBAR Foundation.
  3. Entropya decentralized crypto custodian, raised $25 million for its funding round led by a16z.
  4. “It’s always sunny in Philadelphia,” actor Rob McElhenney’s Web3 entertainment startup, Adamraised $5 million in seed funding in a round led by a16z.
  5. Decentralized exchange ApolloX secured an undisclosed amount in seed funding from investors including Binance Labs and Kronos Research.
  6. Euler Financea non-custodial crypto lending protocol, raised $32 million with Haun Ventures as lead investor in its Series A.
  7. Data infrastructure provider Vybe Network announced the closing of a $10.5 million Series A investment led by FTX.
  8. Mash potatoesa payments platform enabled by Lightning Network, has secured $6 million in seed funding co-led by Castle Island Ventures and Whitecap Venture Partners.
  9. Cryptoan institutional crypto accounting platform, landed $10 million in a Series A led by Point Nine.
  10. NFT portfolio management startup Floor raised an $8 million seed round led by 6thMan Ventures.

the week in web3

As Anita heads to the Consensus Crypto Conference in Austin this week, we reflected on the aspects of web3 that still seem to excite and energize crowds, even during tough times in the markets.

  • Web3 entrepreneur Tux Pacific summed it up nicely: In fact, I’ve never felt like I’ve been in a space where it was more acceptable for people to be so different. If you go to a [crypto] conference, it’s just full of weird, weird people,” Pacific says Anita in an interview. Pacific, one of the few trans and queer founders in crypto with big-name backing, also discussed how his unique background informs his new approach to building a crypto custody company.
  • It might be a bold time to raise capital to invest in web3, but Ledger, a hardware-focused crypto security startup, has teamed up with French venture capital firm Cathay Innovation to do just that. . The pair have raised $110 million to invest in early-stage crypto startups. Ledger founder and CEO Pascal Gauthier told Anita why he was so confident now is a good time to deploy capital in crypto.
  • Solana Labs is doubling down on South Korea, where it’s seeing growing demand for games and NFTs. Solana Ventures and Solana Foundation have set up a $100 million fund to support startups nationwide – Jacquie has the details.

TC+ analysis

Here are some of the crypto analyzes from this week that you can read on our TC+ subscription service (written by TC’s Jacquelyn Melinek):

Bipartisan U.S. crypto bill could be ‘sigh of relief’ for industry
Earlier this week, U.S. Senators Cynthia Lummis, Republican from Wyoming, and Kirsten Gillibrand, Democrat from New York, proposed a crypto bill that could provide guide rails around the digital asset space. The bill was aimed at many corners of the crypto world and market participants called it a “step in the right direction” and not an “escape” from strict regulation, but a change with more rules. clear.

DOJ case against ex-OpenSea executive could qualify NFTs as securities, ex-SEC lawyer says
A former executive of OpenSea, the largest NFT market, was arrested and charged last week “with wire fraud and money laundering as part of a scheme to commit insider trading in [NFTs]according to a press release from the U.S. Attorney’s Office for the Southern District of New York. Now this case could have the potential to determine whether or not NFTs are defined as securities.

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