Crypto, where the fallen seek a new start – TechCrunch
Welcome back to Chain reaction.
Last week we talked about privacy in crypto and how it sometimes runs afoul of regulation. This week we cover a larger-than-life entrepreneur who may be seeking redemption through web3.
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there is always a crypto angle
A weekly window into the mind of senior crypto reporter Anita Ramaswamy:
It’s a lesson we’ve all learned during the recent crypto bull run – crypto is a well-known refuge for those looking to reinvent themselves. WeWork founder Adam Neumann is no exception. Neumann made waves in the tech world this week when it was revealed that his new startup, focused on residential real estate communities, had just received a $350 million investment from Andreessen Horowitz — the largest check the VC firm has ever written, though it was unclear how much of that was equity versus debt. The company, Flow, earned a $1 billion valuation before, well, actually doing anything (except buying up apartments), according to The New York Times.
In a slightly ironic twist, the new venture aims to try to solve the housing crisis, a plan highlighted by Marc Andreessen himself in a blog post announcing the deal. Andreessen is the VC who earlier this month was found to have fought tooth and nail to prevent affordable housing from being built in his affluent hometown of Atherton, California. Initial details, however, were few about how Neumann’s company would actually deal with the crisis, other than some vague comments that renters could not benefit from owning the equity in the home.
As if all that wasn’t enough to take in, now there’s a crypto angle.
Forbes reported this week that Neumann’s startup, called Flow, plans to launch a digital wallet for cryptocurrencies. But there appears to be little to no overlap between the wallet product and the firm’s stated focus on real estate technology, as the wallet will not allow people to make rent payments on Flow-owned apartments through crypto.
The company has, according to Forbes, recruited candidates by describing the business as a “next-generation multi-family property management system” that will include a tokenized rewards program and crypto payment capabilities. A Flow spokesperson later told Forbes that the job description was largely false and blamed an outside recruiter the company had worked with.
It’s still not clear how big a role crypto will play in Flow’s roadmap, but the spokesperson gave Forbes a new job description that simply focused on “technology” in residential real estate rather than crypto or web3 specifically.
This is not Neumann’s first rodeo in the wild west of web3. He raised $70 million, also led by a16z, for Flowcarbon in May, a startup that intended to tokenize carbon credits on the blockchain. Flowcarbon has since halted a planned token sale, citing adverse market conditions, and appears to have removed references to Neumann from the team page despite listing him as a co-founder of the venture at the time the a16z investment was announced. Curiously, the Flow announcement this week from a16z cited Flow as Neumann’s first venture since WeWork, as if he was never involved with Flowcarbon at all.
While many founders with substance and potential continue to be overlooked by today’s VC ecosystem, a16z’s choice to bet so heavily on the infamous Neumann speaks volumes about investors’ priorities. Even if something good comes out of this venture, it might be a gripping TV series.
the last pod
Jacquelyn and Anita took the reins on the week’s news once again while Lucas was out, and the first item on their agenda was pretty juicy.
Do Kwon, the disgraced founder behind the Terra stablecoin collapse, gave his first interview since going into hiding after losing billions of dollars on behalf of investors. He sat down with Coinage, an NFTV show from startup Trustless Media, to talk about his role in triggering crypto’s biggest crash.
After recapping the highlights of the Do Kwon interview, Anita and Jacquelyn talked about Galaxy Digital trying to say “jk lol” after agreeing to buy crypto custodian BitGo, and went over both bad and potentially good news for Crypto.com .
Be sure to tune in to our guest interview next Tuesday, where Anita will chat with Devin Lewtan, co-founder of web3 media production studio Mad Realities.
Subscribe to Chain Reaction on Apple, Spotify or your alternative podcast platform to catch up with us every week.
follow the money
Where startup money moves in the crypto world:
- Decentralized communication platform Satellite IM closed a $10.5 million round led by Framework Ventures and Multicoin Capital.
- Rocket site raised $9 million in seed funding to build “Fidelity for crypto.”
- Tencent veterans at .bit secured $13 million to build decentralized identities across chains.
- Binance Labs made a strategic investment in web3 infrastructure protocol Ankr.
- Solana-focused Jito Labs raised $10 million in a Series A led by Multicoin Capital and Framework Ventures.
- Game studio Murasaki closed a €1.5 million seed round led by the Japanese Incubate Fund.
- B2B web3 data analytics company Datawisp raised $3.6 million in a seed round led by Coinfund.
- Animation studio Invisible Universe raised $12 million in Series A funding led by Alexis Ohanian’s Seven Seven Six to launch new web3 IP.
- Fractional NFT platform Tessera (fka Fractional) raised a $20 million Series A led by Paradigm.
- Starknet-based gaming DAO MatchboxDAO raised $7.5 million led by Starkware.
This list was compiled using information from Messari as well as TechCrunch’s own reporting.
Here is some of this week’s crypto analysis available on our subscription service TC+ from senior reporter Jacquelyn Melinek:
Polygon’s chief investment officer remains ‘very bullish on web3’
The crypto market may be in limbo between a deep bear market and recovery, but that hasn’t stopped investors from deploying capital in the space. “In the grand scheme of things, nothing has changed about Polygon’s long-term mission, bear markets or not,” Shreyansh Singh, chief investment officer at Polygon, told TechCrunch.
Anthony Hopkins sees NFTs as ‘art in a new format’
While celebrities and athletes alike are diving into the cryptosphere to support tokens or companies, others are looking to NFTs as a way to engage with fans. The newest entrant is two-time Oscar-winning actor Sir Anthony Hopkins, who partnered with NFT’s digital collectibles company Orange Comet to launch his own series, The Eternal Collection. “NFTs, to me, are a blank canvas to create art in a new format,” Hopkins shared with TechCrunch.
Crypto fraud has declined, but hackers remain resilient in bearish markets
In terms of crime, illegal activity remains abundant regardless of crypto volatility, according to a new Chainalysis report. But there are nuances to the apparent decline in illegal activity – some sub-sectors of crypto-based crime increased in 2022, while others declined.
Open source software is needed to prevent future crypto hacks, Polygon CISO says
As 2022 continues to rack up expensive exploits, many people in the crypto space are wondering what can be done to prevent these hacks in the future. Sure, they might stress the importance of education and protecting your own digital assets — but what else? The answer may be through projects that use open source software, Mudit Gupta, head of information security at Polygon, told TechCrunch.
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