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Large investment announcements made during the last week were noteworthy, but overall market sentiment is still negative. As they battled to survive in the wake of the so-called crypto winter and the collapse of FTX, a number of businesses announced employment layoffs. Speaking about FTX, the company’s lawyers contacted Sam Bankman Fried’s immediate family for clarification after learning about its new debtors last week.
The bear market continues to offer value to long-term investors. Significant fundraising rounds for a number of businesses, including Blockstream and QuickNode, were disclosed.
A web3 infrastructure company called QuickNode which offers blockchain development tools raised $60 million in a Series B financing, valuing the company at $800 million. In addition to Alexis Ohanian’s Seven Seven Six, Tiger Global, Protocol Labs, and QED Investors, the primary investor was Dan Tapiero’s 10T Holdings.
In order to expand its bitcoin mining hosting services, Blockstream, a supplier of crypto infrastructure, raised $125 million through convertible notes and secured loans. Kingsway Capital was the principal investor in the Convertible Note, together with Fulgur Ventures and other investors.
Another major round of investment was received by Spatial Labs, a web3 infrastructure company that aims to enhance metaverse and commerce, which secured $10 million in startup money. According to Crunchbase statistics, just approximately 1% of venture capital financing flowed to firms with Black founders in the United States in 2022, making it a rare windfall for a Black entrepreneur. Iddris Sandu, the CEO and creator of Spatial Labs, is 25 years old. He believes he may be the first Black founder under 30 to raise a seed round of more than $10 million.
Last week, a number of companies announced layoffs as the cryptocurrency sector continues to face difficult market circumstances.
Luno, a cryptocurrency exchange operated by Digital Currency Group (DCG), reduced 35% of its personnel due to the “extremely terrible year” hurting the cryptocurrency sector. According to reports, there were 960 employees at Luno, which means 330 or more jobs were destroyed. Over the past year, DCG has come under growing strain as the crypto crisis has become worse against a tumultuous macroeconomic background. The firm’s poor performance was made worse by the failure of FTX in November and the bankruptcy of the cryptocurrency hedge fund Three Arrows Capital in June.
Gemini, a cryptocurrency exchange, has cut 10% of its workforce in three rounds since June. 10% of Gemini’s workers were let go in June, and more layoffs occurred in July. As a result, from 1,100 employees at the start of 2022 to around 700 by the end of the year, its entire headcount decreased. In November, Gemini stopped letting customers withdraw money from its Earn program because its lending partner, Genesis Global Capital (a DCG subsidiary), had serious liquidity problems. Genesis sought bankruptcy protection and owes 340,000 Gemini Earn customers more than $765 million.
Jihan Wu, a multibillionaire businessman, owns the cryptocurrency services firm Matrixport, which laid off around 30 people or 10% of its staff. In all, Matrixport employed over 290 people.
CoinTracker, the unicorn of crypto tax software, let off 19 people, or nearly 20% of its workforce, citing market challenges and “over-hiring.”
After FTX filed for bankruptcy in November, the lawsuit has continued to progress. A fresh, comprehensive list of FTX’s creditors was made public last week, and it includes IT behemoths, sports figures, and governments. The following companies are identified as FTX creditors: Amazon Web Services, Apple, Meta Platforms, Twitter, Netflix, Adobe, Tom Brady, U.S. Attorneys general, consumer affairs, and state tax office.
New court records revealed that FTX bankruptcy attorneys are requesting authorization to subpoena former CEO Bankman-Fried, his family, and senior employees of the defunct cryptocurrency exchange.
Attorneys are accusing Joseph Bankman and Barbara Fried, as well as Gabriel Bankman-Fried, of acting as Bankman-advisors. Fried’s Additionally included in the documents were FTX co-founders Gary Wang and Nishad Singh, Caroline Ellison, a former CEO of Alameda Research, and Constance Wang, a former chief operating officer of FTX Trading Ltd. and co-CEO of FTX Digital Markets Ltd. The personal assets of FTX insiders as well as the assets and business operations of FTX are among the topics that lawyers are searching for information and documentation about.
On the other side, Bankman-attorneys Fried’s claimed that he should be permitted access to the assets and cryptocurrency held by FTX because there is no proof that he is accountable for earlier suspected illicit activities.
Bankman-attorney, Fried’s Mark Cohen, said in a letter that “almost three weeks have gone since the original pretrial session and we presume that the Government’s investigation has corroborated what Mr. Bankman-Fried has stated all along, namely, that he did not access and transfer these funds.” “We feel that the bail condition imposed at the conference should be withdrawn given that the single justification stated for obtaining that condition has not been sustained.”
Last but not least, after prosecutors claimed that Bankman-Fried recently contacted a prospective witness in his criminal case, the U.S. Attorneys requested that a federal judge order him to refrain from speaking with current and former FTX workers without a lawyer present. Additionally, the prosecution wants to prevent Bankman-Fried from using encrypted chat platforms.
