Posted In:

Crypto, Ukraine


#427
Read The Fine Print

Published:

Mar 05, 2022


Author:

Roxy Horrie

Posted In:

Crypto, Ukraine

Published:

Mar 05, 2022


Author:

Roxy Horrie


Share:

This week was a DeFining moment for crypto; a global awakening across citizens and nation states of the value (and risks) of self-sovereign, borderless digital assets and financial systems. Not lost on market observers was the fact that Bitcoin had its best trading day in over a year on Monday — finishing the day up over 15% and breaking direction from equities on a day which saw the start of a deep Russian credit crunch in response to global sanctions.

Events this week also served as a reminder that both centralized components of the crypto stack and industry service providers are still very much within the confines of regulated finance. A top Ukrainian official calling for crypto exchanges to freeze all Russian citizen accounts, the Canadian Securities Commission publicly shunning the promotion of self-custody wallets, Iranian citizens blocked from NFT marketplace OpenSea, and popular Ethereum node infrastructure provider initially limiting wallet access to users in Venezuela are all prime examples.

True DeFi is pure neutral tech. It doesn’t care if you are Ukrainian, Russian, protestors, or dissidents. And it has demonstrated that it can enable a digital cash standard and alternative financial system that introduces currency and payment competition. This naturally challenges authority and entities in power, but it also acts as an equalizer for the world.

This week over $50m of digital assets has been sent directly to Ukrainian government controlled crypto wallets from individuals all over the world. This is already two times the money that has been pledged by the UN for Ukrainian humanitarian efforts, and demonstrates how crypto helps to reimagine how money can move through the world.

But it would be naive to think the separation of state and money and the freedom to transact privately in a digital world won’t be increasingly messy — especially in a world of monetary weaponization. As demonstrated this week, it’s worth reading the fine print on common “DeFi” experiences.

With the world continuing to digest the impacts of coordinated global economic sanctions on Russia, it appears by and large regulators are not too worried about the use of crypto to circumvent sanctions given the industry’s stage of maturation and paradoxical wide-spread dependence on centralized entities. It’s not as impactful as banning tracksuit sales into Russia, but shockingly a globally open self-verifiable ledger can also be a pretty effective tool for enforcement.

Portfolio News


The Blockchain 50: The top blockchain companies of 2022 - Congratulations to portfolio companies Axoni, NYDIG, and OpenSea for being named to CB Insight's Blockchain 50, which is an annual ranking of the 50 most promising blockchain and crypto companies in the world. This year's winners include blockchain infrastructure providers, crypto exchanges, custody and wallet services, NFT marketplaces, and more. Read more

Salary on-demand startup, Cadana, teams up with Flutterwave to expand into Nigeria - Cadana helps employees by providing modern payroll platforms that allow employees access to their earned salary on-demand, anytime, anywhere. Following this partnership, Flutterwave processes payments for employers and employees on Cadana. Read more

Do you really know if you are doing business with a Russian oligarch, Putin or a sanctioned company? - Portfolio company Sigma Ratings is making key risk-related Russia datasets available at no charge to financial institutions, fintechs and multinational corporations. These datasets identify over 100,000 companies and people with potential connections to the Russian regime - enabling you to better understand if your customers, suppliers and vendors might be exposed. If you are interested in obtaining access to this data set, please reach out to the team at info@sigmaratings.com. Read more

Pay-on-demand pioneer Minu offers payroll win-win-win - Minu's mission is to improve the financial health of millions of workers. They see that the financial life of employees is closely related to their banks and financial institutions, but is disconnected from their employers. They are driving the transformation of employers not only as employees main source of income, but also as an enabler of financial wellness. Read more

Read The Fine Print


Ukraine has raised more than $54m as bitcoin donations pour in to support the war against Russia - Since Moscow invaded on Feb. 24, over 102,000 cryptoasset donations, totaling $54.7m, have gone to the Ukrainian government and Come Back Alive, an NGO providing support to the military, according to new data from blockchain analytics firm Elliptic. Donations have also come in the form of nonfungible tokens and stablecoins like tether. Read more

Crypto exchanges resist calls for ban on Russia transactions - Crypto exchanges are coming under pressure to block transactions with Russia, as western politicians fear that cryptocurrencies provide a back door to move money around the world while they seek to shut Russia out of the global financial system. However, while most will comply with curbs on individuals, some say bans ‘fly in the face of the reason why crypto exists’. Read more

In move to sanction Russia, Switzerland breaks from long tradition - In a sharp break with its long-standing neutrality, Switzerland announced that it would join the European Union in imposing sanctions on Russia over its invasion of Ukraine, filling a key gap in Western efforts to curb the Kremlin following widespread criticism of the Swiss government. Read more

​​Coinbase is latest exchange to deny Ukraine request to block Russian crypto users - Over the weekend, Ukraine's vice prime minister and Minister of Digital Transformation, Mykhailo Fedorov, publicly appealed to "all major crypto exchanges to block addresses of Russian users." Fedorov tweeted in English: "It's crucial to freeze not only the addresses linked to Russian and Belarusian politicians, but also to sabotage ordinary users." Read more

Ethereum's Infura cuts off users to separatist areas in Ukraine, accidentally blocks Venezuela - Venezuelan users of two major ConsenSys software products, MetaMask and Infura, found themselves all but cut off from the Ethereum network today, with many reporting they had been blocked from their wallets. Infura, which hosts Ethereum nodes and and operates blockchain infrastructure on behalf of companies, says the problem was accidental and has been resolved. It came about, Infura says, due to accidentally reconfiguring settings "more broadly than they needed to be" to comply with "new sanctions directives." Read more

Industry News


Griffin says 'fair to assume' that Citadel Securities will be market making in crypto in 'months to come' - In response to a question about Griffin's past stance on crypto and the recent participation of VC firm Paradigm in Citadel Securities's $1.15b funding round earlier this year, Griffin said that crypto "has been one of the great stories in finance over the course of the last 15 years." Read more

Amid global VC growth in 2021, tech funding in Africa grew faster than in any other region - In 2021, the tech ecosystem in Africa reached 2x the quantity of rounds and more than 3x the amount invested compared to the previous year. While there has been an acceleration throughout all round brackets, total funding was driven by a re-surge in large rounds above $50m. Read more

Visa, Mastercard block Russian financial institutions after sanctions - The government sanctions require Visa to suspend access to its network for entities listed as Specially Designated Nationals. The United States has added various Russian financial firms to the list, including the country's central bank and second-largest lender VTB. Visa and Mastercard also both pledged $2m toward humanitarian relief funds for Ukraine. Read more

TD expands U.S. footprint with $13.4b acquisition of First Horizon - The deal, the largest in TD's history, is expected to close during the bank's fiscal first quarter, which ends on Jan. 31, 2023. It will take TD into new markets in Louisiana, Tennessee, Texas and Georgia. TD said it would become the sixth-largest U.S. bank by assets, with business in 22 states, after the deal closes. Read more

Sanctions significantly increase chances of a Russian international debt default - Russia has over $700m worth of government bond payments due this month. While in theory it has ample reserves to cover debt, in practice a freeze on some assets and other measures could affect its ability to make payments. Read more

Australia's Zip to buy U.S. buy-now-pay-later rival Sezzle amid softening market - Zip and Sezzle, which are both listed in Australia, had previously disclosed that they were discussing a buyout. They said they agreed terms this week, just as Zip confirmed a A$108.1m loss for July-December, excluding one-off items, versus a small underlying profit a year earlier. Read more

Credit Suisse caught trying to shred evidence of loans to Russian oligarchs backed by superyachts and private jets - According to reports in the FT, CS has quietly been offloading risks from its exposure to U.S.-sanctioned Russian oligarchs, after this group was responsible in 2017 and 2018 for a third of the defaults on yacht and private jet loans the bank extended. Hedge funds and other investors that bought securitized portfolios of these deals, backed by the ultra-luxury status items, were asked in a letter this week to “destroy and permanently erase” any evidence of the transaction, the paper reported. Read more

US investment into European startups reaches record levels - The flood of US capital into European startups is poised to accelerate this year after participation from investors across the pond reached a record high in 2021. Last year marked the first time that investment in European and Israeli startups crossed the €100b mark. The presence of US investors has, however, pushed up deal sizes, and valuations follow. The median European round with US participation nearly doubled in 2021 to €38m, compared with €19.4m the year before. Read more

Klarna’s widening losses driven by rapid expansion - The Swedish ‘buy now, pay later’ start-up posted a significant jump in credit defaults as it pushed into new markets. At the same time, retail banks like Monzo, Revolut, Virgin Money and Barclays have either trialed or have recently rolled out BNPL products of their own bringing competition to the space. The CEO of Klarna is not worried, comparing their efforts to retailers’ who have pivoted into ecommerce. “If they really go for it full-heartedly and make necessary changes, some will be able to succeed,” he said. Read more

Friends With Benefits is a V.I.P. lounge for crypto’s creative class. Is it empty hype or the future of friendship? - A decentralized autonomous organization (DAO) called ‘Friends with Benefits’ has grown into a social club of 6000 members for crypto’s ‘creative class’. Culturally, the membership skews less “Lamborghini-driving Bitcoin bros” and more “D.J.s from Williamsburg who dabble in Ethereum on the weekend.” In a recent orientation session, new members introduced themselves: an intellectual-property lawyer, a poet-slash-investor, a brand strategist for Nike, a handful of musicians and software engineers! Read more

Borrowed money funded share purchases by ‘Spac king’ Palihapitiya - Chamath Palihapitiya, the venture capitalist touted large personal investments when plugging his SPAC deals and called for others to put more “skin in the game”. However the FT points out that Palihapitiya’s definition of “investment” charitably included his use of $200mn in personal loans taken out from Credit Suisse to leverage his holdings and lower his actual investment costs closer to zero. Read more

Select Financings


Atomic - Salt Lake City based provider of payroll APIs raised $40m in Series B funding led by Mercato Partners and Greylock. Read more

Counterpart - California based insurtech management liability platform raised $30m in Series B funding led by Vy Capital, Valor Equity Partners, and Felicis Ventures. Read more

Emtech - Africa based central bank digital infrastructure provider raised $4m in Seed funding led by Noemis Venture and Octerra Capital. Read more

Fieldguide - San Francisco based automation and collaboration platform for audit and advisory firms raised $17m in Series A funding led by 8VC. Read more

FreeWill - New York based estate planning and charitable giving startup raised $30m in Series B funding led by Bain Capital Double Impact. Read more

Kin Insurance - Chicago based direct-to-consumer home insurance company raised $82m in Series D funding led by QED Growth. Read more

Leasy - Lima based auto financing company for ride-hailing drivers raised $2m in Seed funding led by Magma Partners. Read more

Lido Finance - Decentralized staking platform raised $70m in new funding led by a16z. Read more

M-KOPA - Kenya based asset financing platform raised $75m in growth equity funding led by Generation Investment Management and Broadscale Group. Read more

Nested - Paris based DeFi social trading platform raised $7.5m in Series A funding led by Alan Howard. Read more

Nosso - UK based family finance startup raised $2.8m in Seed funding led by Octopus Ventures and Anthemis. Read more

Payhawk - Bulgaria based spend management platform raised $100m in Series B funding led by Lightspeed Venture Partners. Read more

Perfios - Bengaluru based credit decisioning company raised over $70m in Series C funding led by Warburg Pincus LLC and Bessemer Venture Partners. Read more

Plum Life - New Jersey based digital life insurance sales platform raised $5.3m in Seed funding led by ManchesterStory. Read more

Rarify - New York based API for adding NFTs raised $10m in Series A funding led by Pantera Capital. Read more

Seller - Australia based neobank for SMBs raised $73m in Series B funding led by Headline. Read more

Shares - London based social investing app raised $40m in Series A funding led by Valar Ventures. Read more

SteadyPay - London based income volatility management startup for gig workers and freelancers raised $5m in Series A funding led by Digital Horizon. Read more

Tenderly - Serbia based blockchain infrastructure startup raised $40m in Series B funding led by Spark Capital. Read more

Thetanuts Finance - US based crypto derivatives platform raised $18m in Seed funding led by Three Arrows Capital, Deribit, QCP Capital and Jump Crypto. Read more

VALR - South Africa based crypto exchange raised $50m in Series B funding led by Pantera Capital. Read more

Volopay - Singapore based spend management startup raised $29m in Series A funding led by JAM fund. Read more


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