7-Day Market Moves

Last week the crypto-verse saw some intriguing movements. Bitcoin inched up by 0.8%, while Ether fell by 3.6%. Top losers were Solana and Binance's BNB token, sliding 23.98% and 16.08% respectively over the week due to the SEC's labelling of them as unlawfully issued securities.

Why the tumble, you ask? Well, both Solana and BNB have found themselves in the crosshairs of the U.S. Securities and Exchange Commission (SEC). Last week, the regulatory body labelled these two, alongside others, as unlawfully issued financial securities, sparking lawsuits against U.S. crypto exchanges Coinbase and Binance.US. And if that wasn't enough, the SEC even attempted to freeze Binance.US's assets.

Fun fact, the US government depends on Coinbase to sell seized assets.

Amid this SEC drama, Polygon and Cardano managed to gain slightly but are still down over 20% since the SEC's legal actions. This regulatory tug-of-war has certainly kept SEC Chairman Gary Gensler busy, as he staunchly defends the lawsuits against crypto exchanges. Not everyone is on board with his approach though—two U.S. congressmen have proposed a bill to overhaul the SEC and oust Gensler from his chair.

‍

The Alts Are Fighting For Dear Life

Good question!

In the ongoing tussle between the SEC and Crypto, there's another victim - Altcoins.
Currently, the alts are drowning in a sea of red. This was made worse after Robinhood and E-toro announced that they would stop offering coins like MATIC and MANA to their vast retail user base.
Is this a case for DEX-es in the very near future?

Keeping Up With Memecoins

Remember memecoins?

Well, some fear that their charm may be waning, as the once common high returns ranging from 10-100x are dwindling. Nevertheless, this doesn't signal the end of these meme-based narratives—there are still promising plays on the field.

Overseas, Chinese memecoins have been making waves in the past two weeks. Capitalizing on encouraging crypto news from China and Hong Kong, memecoin developers have seen substantial gains: $BIAO rewarded early adopters with a staggering ~86x return, although it has since dropped ~85% from its peak as of June 1, while $NIHAO ballooned early investors' stakes by a whopping 92.75x, despite falling 50% from its peak as of June 1, 2023.

Crypto Investment Firm A16Z Crypto Expands Globally, Sets Up Shop in London

TL: DR

• A16Z crypto expands with its first international office in London.
• The move is due to the UK's favourable regulatory environment for crypto.
• The company will work with UK crypto firms and universities.
• A16Z crypto remains committed to the US, advocating for regulatory clarity.

In a strategic move following U.S. regulatory actions against the crypto industry, A16Z Crypto, the crypto investment arm of Andreessen Horowitz, is establishing its first international office in London. Citing the need for a regulatory framework that fosters innovation while protecting consumers, A16Z crypto highlights the United Kingdom's favourable approach to blockchain and digital asset regulation. The expansion aims to support the growth of the crypto and startup ecosystem in the UK and Europe.

A16Z Crypto's decision to open its London office comes in the wake of their report on the decline of crypto activity in the U.S., urging against banning new business models and technologies. The company acknowledges the challenges posed by the "casino culture" in crypto and emphasizes its collaboration with policymakers and regulators worldwide to enable decentralized solutions. The UK office, led by Sriram Krishnan, a general partner, will focus on strengthening partnerships, investing in UK-based crypto companies, and hosting the Crypto Startup School in London next spring.

While reaffirming their commitment to the U.S., A16Z crypto highlights the early stages of the crypto industry and the importance of decentralization. The move underscores London's emergence as a hub for Web3 innovation and its collaboration with leading investors. UK Prime Minister Rishi Sunak welcomed the decision, expressing determination to unlock opportunities and establish the UK as the world's centre for Web3. A16Z Crypto reiterates its dedication to working with U.S. policymakers to enhance regulatory clarity for crypto startups at home.

In other news,

• Ex-SEC Head hints at possible sealed criminal indictment against Binance. Read more.
• Crypto Funds see a $417M investor exodus in just two months. Read more.
• Solana, Cardano, Polygon contest SEC's 'security' classification. Read more.

Decentralized AI Startup Gensyn AI Secures $43 Million Funding Led by A16Z Crypto

TL: DR

• UK-based Gensyn AI secures $43 million in funding led by a16z crypto.
• Gensyn AI aims to make AI tools accessible through a pay-as-you-go model.
• Their decentralized protocol connects machine learning-capable hardware worldwide.
• Funding will be used to expand the team, improve technology, and launch a test network.

The UK-based machine learning company Gensyn AI has raised $43 million in Series A funding, led by A16Z crypto. The company, founded in 2020 by Ben Fielding and Harry Grieve, aims to empower developers with a pay-as-you-go model for creating AI tools. Gensyn AI's decentralized machine learning compute protocol connects machine learning-capable hardware worldwide, enabling engineers, researchers, and academics to access it. They have developed a solution to verify the proper execution of computational tasks, specifically focused on machine learning training.

Gensyn AI operates as a layer one proof-of-stake blockchain based on the Substripe protocol, ensuring scalability and low verification overhead. The funding round included participation from CoinFund, Canonical Crypto, Protocol Labs, Eden Block, and angel investors. The partnership with a16z crypto reflects their shared vision of democratizing AI and making infrastructure more widely accessible.

The investment will be used to expand the Gensyn AI team, cover production costs, and launch a test network later this year. Gensyn AI's focus on machine learning, combined with their decentralized trust layer, sets them apart in the rapidly evolving AI industry. The funding and collaboration with a16z crypto position Gensyn AI to build a groundbreaking platform and level the playing field for startups in the AI race.

In other news,

• Bitget launches AI-powered strategy for traders. Read more.

Crypto.com Shuts Down US Institutional Service Due to Limited Demand

TL: DR

• Crypto.com shuts down US institutional service due to low demand.
• Retail app with 80+ million users unaffected.
• Decision driven by market factors, not regulatory issues.
• Crypto.com continues to offer essential crypto services.

Crypto.com has announced the closure of its institutional service for clients in the United States. The decision, effective from June 21, is attributed to the current market landscape, where American institutions have shown limited demand. This move, however, will not affect Crypto.com's popular retail app, which boasts a user base of over 80 million globally.

Despite Crypto.com's prominent presence and star-studded commercials featuring actor Matt Damon, the company had previously downsized its global workforce by 20% in January. The challenging regulatory environment for crypto companies in the United States, including recent actions by the Securities and Exchange Commission (SEC), has further exacerbated the difficulties faced by industry players.

While the SEC's scrutiny and Chairman Gary Gensler's skeptical stance on unregistered securities have added pressure, Crypto.com's decision is primarily driven by the lack of demand from American institutions. The company remains committed to providing its clients with essential crypto services, including the ability to buy, sell, and spend cryptocurrencies through their platform, which includes a Visa debit card for digital asset transactions.

In other news,

• Coinbase invited to operate in Hong Kong following the SEC fallout. Read more.
• South Korean crypto yield platform Haru Invest pauses withdrawals and deposits. Read more.

Hackers Drain 442 ETH from Sturdy Finance in Recent DeFi Attack

TL: DR

• Sturdy Finance, a DeFi lending protocol, lost 442 ETH ($768,800) due to an exploit.
• The attacker manipulated a collateral pool's price oracle to drain funds.
• Sturdy Finance paused activity, investigating the incident, with withdrawals temporarily suspended.

DeFi lending protocol Sturdy Finance recently experienced a devastating exploit resulting in the loss of 442 ETH, valued at approximately $768,800. The breach came to light thanks to blockchain security firms PeckShield and BlockSec, prompting Sturdy Finance to halt activity on its DeFi platform temporarily while launching an investigation. The lending protocol, which allows users to borrow against liquidity provider (LP) tokens from exchanges like Curve and Balancer, offers lending markets for Ethereum and dollar-pegged stablecoins.

While the stablecoin market remains unaffected, users are currently unable to withdraw funds from Sturdy Finance's pools as a precautionary measure. The team at Sturdy Finance, with core member Sam Forman leading the efforts, is primarily focused on comprehending the nature of the exploit and finding ways to mitigate its impact. Communication with the hacker is also a priority for the team.

The initial findings suggest that the attacker manipulated the price oracle of a collateral pool, enabling them to drain funds from Sturdy Finance. BlockSec's postmortem report on the attack revealed that it involved a "typical Balancer's read-only reentrancy" exploit.  This incident underscores the ongoing security challenges faced by DeFi platforms and emphasizes the need for robust security measures and constant vigilance to protect user funds.

Former Facebook Executive to Spearhead Thirdweb's Web3 Gaming Ambition

TL: DR

• Former Facebook exec, Atif Khan, joins Thirdweb as VP of Gaming to boost Web3 gaming.
• Thirdweb offers a complete Web3 toolkit to simplify decentralized game development.
• The company demonstrated its capabilities with a game, Web3 Warriors, attracting significant player engagement.

Khan eyes Web3-native casual mobile games as a catalyst for mainstream adoption.

Web3 infrastructure startup Thirdweb has appointed Atif Khan, a former Facebook exec, as its new Vice President of Gaming. Khan, who is no stranger to the gaming industry after an eight-year stint at Facebook and a COO role at Stardust, is looking to accelerate the growth of the Web3 gaming industry.

Backed by heavyweight investors such as Haun Ventures, Polygon Labs, Coinbase Ventures, and Shopify, Thirdweb seeks to simplify the complex game development process by offering a comprehensive Web3 toolkit to developers, a proposition that Khan finds particularly appealing.

The startup recently demonstrated its capabilities by crafting Web3 Warriors, an on-chain survival action game, in just three weeks. Launched on Base's testnet—an Ethereum layer-2 scaling network by Coinbase—the game attracted over 500 unique players and registered 1,000 sessions in under a week.

Thirdweb employed a 'trojan horse' strategy, emphasizing familiar gameplay and fun, while subtly incorporating blockchain elements, such as non-custodial wallets and NFT skins. Khan believes that the key to taking the Web3 gaming industry to the next level lies in casual, mobile games. Web3-native casual games, he posits, will outstrip traditional games incorporating blockchain technology and serve as a catalyst for mainstream adoption. With this perspective, he aims to expand Thirdweb's user-friendly approach to a wider range of crypto experiences, with the ultimate goal of becoming the best, most comprehensive development tool across the Web3 ecosystem.

In other news,

• Metaverse Beauty Week by Decentraland, Roblox and Spatial is ongoing. Read more.