✨ new crypto hope
Meta sells stablecoin dream, Putin recognizes crypto's influence, FTX US raises $400 million and more.
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First up,
Market Recap 📈
Indian and US benchmark indices ended in red after Federal Reserve Chairman Jerome Powell indicated an interest rate hike in March to tackle persistent inflation.
Sensex: 57,276.94 (-1.00%) ↓
Nifty 50: 17,110.15 (-0.97%) ↓
Dow Jones: 34,168.09 (-0.38%) ↓
Nasdaq 100: 14,172.76 (+0.17%) ↑
Bitcoin: $36,457.05
Top Stories 📰
1. Meta sells ambitious stablecoin project Diem
The Diem Association, a Meta-backed crypto initiative that Mark Zuckerberg once defended in Congress, is reaching its end with the company due to regulatory pressure.
The social media giant is reportedly selling its assets, including IP, to Silvergate Capital Corp for $200 million to return capital to its investor members.
A brief overview: Back in 2019, Meta first introduced its concept of stable crypto—aka stablecoins—in hopes of democratizing global financial services. The project, then known as Libra, involved collaborations with several companies, many of whom have since caved in due to regulatory scrutiny, including Mastercard, Paypal, and Visa.
Finally, in May last year, when they found a banking partner Silvergate who agreed to issue Meta's Diem USD stablecoin, the Federal Reserve said that it couldn't guarantee approving its plans. And that proved to be the final blow.
Now, Meta’s entire ownership—which accounts for almost a third of the entire project—will be held by Silvergate, while the rest will be controlled by other VCs and tech firms involved in the project.
Why it matters? While it's still unclear how much value the sale will bring to the project, the Feds have made one thing clear: stablecoin issuers should be treated as regulated banks if they allowed the use of tokens for buying and selling activities. For them, not doing so would lead to "an excessive concentration of economic power” in the hands of tech corporations.
2. Putin offers some hope for crypto
Russian President Vladimir Putin says that the nation has "certain competitive advantages" in mining digital currencies such as Bitcoin.
The comment, which Putin made during a videoconference with government officials, comes a week after the nation's central bank called for an outright ban on digital currencies, citing volatility and illegal use concerns.
Wait, what's happening again? Russia's central bank and politicians are clashing over how much control is needed on crypto. While the finance ministry and parliament representatives said that regulations were needed—not restrictions—the Bank of Russia said that a complete prohibition would ensure national and individual safety.
"The central bank has its own position. It is connected with the fact that the expansion of this type of activity carries certain risks, and first of all for the citizens of the country, given the high volatility and some other components of this topic," Putin added.
Russia is the third-largest Bitcoin mining country in the world, providing more than 11% of the computing power to the network. Following China's ban on mining activities, an exodus of crypto miners have migrated to Eastern European countries as the region's low-cost energy and cold climate provide higher profit margins and greater hash rate output.
Why it matters? Russia has had quite a change of mind. For years, the nation remained averse to crypto, citing finance terrorism and money laundering concerns, but caved in due to growing popularity and made them legal in 2020. But its use as a means of payment is still banned.
Deal Street 🤑
FTX US fetches $400 million in Series A
Crypto exchange FTX's American affiliate, FTX US, has raised $400 million in its first external fundraising round at an $8 billion valuation, making it the world's most valuable private crypto firm. Lightspeed Venture Partners, Temasek, SoftBank Vision Fund 2, and Paradigm, among others, participated in the fundraising. FTX US was established in May 2020 by CEO Sam Bankman-Fried as a separate division amid growing regulatory scrutiny in the crypto market. Despite operating in a tremendously competitive space with rivals like Coinbase, the platform amassed over 1 million users and saw its volume soar $67 billion in 2021. FTX US plans to use fresh funding towards expanding its user base, hiring new talent, and extending its derivatives offering to retail traders by next year.
SuperDao valued at $160 million
SuperDao, a crypto startup that aims to build an all-in-one DAO protocol, has raised a $10.5 million seed round at a $160 million valuation. Led by SignalFire, the round saw participation from Fika Ventures, Shima Capital, One Block Capital, and Pear Ventures, among others. The 25-person team wants to create a one-click tool that would combine dozens of single-feature solutions required for starting and operating a DAO. “The vision for the company is essentially Shopify for DAOS,” founder Yury Lifshits said. Since last year, DAOs have grown in popularity as they offer a great way to build Web3 startups, NFTs, investment groups and other crypto projects. With this capital infusion, SuperDao plans to hire new staff, improve its operational activities and open an office in Moscow.
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