🚩 more red flags
Regulators probe the NFT market, Ukraine receives millions in crypto donations, Tenderly fetches $40 million in Series B and more.
Hey 👋
Welcome to the mesha tribe. A biweekly newsletter by mesha that brings you valuable insights from finance, biz, and tech to help you take your net worth #ToTheMoon🚀
Sounds good? Sign up below 👇
Great! let’s get started.
First up,
Market Recap 📈
The Indian benchmark indices ended in red, dragged by financial and automobile shares. Meanwhile, US stocks climbed higher after Federal Reserve Chair Jerome Powell pointed to a measured interest-rate liftoff.
Sensex: 55,102.68 (-0.66%) ↓
Nifty 50: 16,498.05 (-0.65%) ↓
Dow Jones: 33,891.35 (+1.79%) ↑
Nasdaq 100: 14,243.69 (+1.70%) ↑
Bitcoin: $43,380.29
Top Stories 📰
1. Ukraine raises over $47 million in crypto donations
Who could've predicted that crowdfunding in the time of war would take such an unusual route? Well, here we are.
To bolster its military campaigns against the Russian invasion, Ukraine has expanded its donation efforts to include cryptocurrencies. The nation's government made the announcement on Twitter last week, sharing its Bitcoin and Ethereum wallet addresses.
According to blockchain analytics firm Elliptic, Ukraine has raised around $47 million in crypto donations. Here's how they did it:
$38.8 million in Bitcoin, Ether, Polkadot, and stablecoins
$6.5 million from UkraineDAO's NFT sale of the Ukrainian flag
$400K raised by Ukrainian NGO Come Back Alive
Others also participated in the fundraising efforts. Russian Billionaire Roman Abramovich announced that he's selling English soccer team Chelsea FC and donating all the net proceeds to Ukrainians affected by the war. FTX founder Sam Bankman-Fried also announced that his company is giving away $25 to each Ukrainian on the platform.
For context: Ukraine’s defence budget was around $6 billion in 2020, less than 10% of Russia’s $62 billion.
Why this matters? Ukraine’s decision to accept crypto donations isn’t surprising considering that it formally legalized crypto days before the Russians invaded. Neither is the use of crypto for funding military operations isn't new. During Russia's annexation of Crimea, both pro-Ukraine and pro-Russian groups funnelled funds to support their armies.
2. The SEC is investigating the NFT market
A new Bloomberg report states that the US Securities and Exchange Commission is scrutinising NFT creators and marketplaces to determine whether such digital assets are being “used to raise money like traditional securities.”
Over the past few months, SEC attorneys allegedly sent out subpoenas to developers and crypto exchanges, seeking additional information about their projects. Their inquiry is focused on the so-called fractional NFTs, which allows people to claim ownership to a share of a divided asset.
So how would they determine this? By conducting the Howey Test—a Supreme Court created framework that determines whether certain transactions qualify as "investment contracts." Under this framework, anything is a security if it includes investors putting money into an asset to make a profit.
This is precisely why crypto lender BlockFi faced heat from regulators in February for illegally offering products that paid high interest rates to lend out their digital tokens. They later settled the allegations by paying a fine of $100 million.
Regardless, these investigations shouldn't come as a shock, as SEC Commissioner Hester Peirce (aka CryptoMom) warned about it.
“Given the breadth of the NFT landscape, certain pieces of it might fall within our jurisdiction. People need to be thinking about potential places where NFTs might run into the securities regulatory regime,” Peirce told Coindesk in December.
Why it matters? Crypto enthusiasts argue that laws that apply to traditional securities shouldn't be applied to crypto utility tokens as they have no value outside their respective projects.
Deal Street 🤑
Hack VC launches crypto fund
Hack VC, a San-Francisco based venture capital firm, has announced a new $200 million crypto seed fund focused on investing in early-stage cryptocurrency and Web3 teams. The fund, which received backing from Fidelity, Andreessen Horowitz, and Sequoia Capital, will be co-led by managing partners Ed Roman and Alex Pack. So far, the firm has invested millions of dollars in at least 15 crypto companies, including DeFi lending platform Goldfinch Finance and NFT emoji startup Yat. Founded in 2017, Hack VC is known for organizing the hack.summit() blockchain programming event, one of the world's biggest blockchain events. Recently, funding for crypto firms has been skyrocketing as crypto adoption becomes more mainstream. In 2021, VCs invested more than $33 billion into crypto and blockchain startups, highlighting the need for user data democratization.
Tenderly raises $40 million
Blockchain development platform Tenderly has raised a $40 million Series B funding round led by Spark Capital. Existing investors such as Accel and Point Nine Capital and new investors like Coinbase Ventures, Uniswap Labs, Abstract Ventures, Daedalus, among others, participated in the round. The announcement brings the total funding raised by the company to $58.6 million. Founded in 2018, the San Francisco-based startup allows Web3 developers "of all skill sets" to create, test, and monitor the health of dApps using its dashboard and APIs. Recently, the startup has seen a 500% growth in revenue and a 420% rise in users year-over-year despite its lacking sales efforts. It plans will use the fresh funds to expand its customer base and partners, build new product offerings for developers, and optimize technical and sales hiring efforts in its new and existing offices.
Tweet Of The Week ✨
Share what you learn 🤝
Found this newsletter insightful? Well, then forward it to your friends and colleagues. Or share it on your social media.
Want to discuss the above stories yourself? Join us.
See ya next week. Bye! 👋