🤔 Where have all the VCs gone?

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This year has been tough for the cryptocurrency industry, and recent data from RootData sheds light on the extent of the challenges. Venture capital investments in crypto companies have plummeted by 70% over the past year, reflecting a decrease in market liquidity.

Although there was a wave of optimism surrounding BlackRock's ETF application, experts caution that a Bitcoin spot ETF still encounters significant obstacles. Moreover, on the tenth anniversary of the Winklevoss twins' initial BTC spot ETF application, Cameron Winklevoss criticized the Securities and Exchange Commission (SEC), describing the situation as a complete and utter disaster.

Markets

Crypto VC Investment Drops 70% In One Year (3 minute read)
Venture capital investments in cryptocurrency companies have experienced a significant decline of over 70% in the past year, as reported by RootData. In June 2022, the digital asset space received a substantial $1.81 billion in funding across 149 rounds. However, this year's figures tell a different story, with only 83 projects securing a total of $520 million, making it the least funded month so far. Despite occasional months of growth in between, the overall trend for VC interest in the digital asset space appears to be declining. Notably, September 2022 recorded the highest funding at $1.85 billion across 138 rounds, while June of the same year saw the largest number of recipients with 149 rounds. A standout in this category was Gensyn AI, a UK-based startup, which secured an impressive $43 million in a Series A round led by a16z crypto.

Spot Bitcoin ETF could still face significant hurdles (3 minute read)
Bitcoin experienced a remarkable surge of almost 25% within a fortnight after it was revealed that investment giant BlackRock had filed an application with the Securities and Exchange Commission for a bitcoin spot exchange-traded fund (ETF). With BlackRock's impressive track record in ETF applications and the potential for ETFs to facilitate retail investors' access to underlying assets, there was optimism that this move could inject millions or even billions into various markets. This news gave Bitcoin holders and investors a glimmer of hope. However, when the Wall Street Journal reported that the SEC requested BlackRock and other recent applicants like Nasdaq, Cboe, and Fidelity to revise and resubmit their applications, industry experts weren't surprised by the development.

SEC Inaction on Spot Bitcoin ETF a ‘Complete and Utter Disaster,’ Says Cameron Winklevoss (3 minute read)
On Saturday, Cameron Winklevoss expressed his dissatisfaction with the Securities and Exchange Commission (SEC), criticizing the agency for what he deemed a decade-long streak of failure. Winklevoss highlighted that it has been ten years since the SEC received the first-ever Bitcoin ETF application, which they promptly rejected. The Winklevoss twins, founders of Gemini crypto exchange, were pioneers in seeking a spot Bitcoin ETF-like trust back in July 2013. Their aim was to establish an investment vehicle that would mirror Bitcoin's price and trade similarly to stocks on exchanges like Nasdaq. Despite making a second attempt in 2018, the SEC ultimately rejected the Winklevoss' filings. Although futures-based Bitcoin ETFs have since gained regulatory approval in the United States, the SEC maintains that no proposed spot ETF arrangement adequately safeguards investors against "fraudulent and manipulative acts and practices." Therefore, on the tenth anniversary of the initial filing, Winklevoss called out the SEC for what he perceives as unnecessary delays, highlighting that every other application for a spot-based Bitcoin ETF has faced similar obstacles.

Tech

Poly Network urges users to withdraw after exploit affects 57 crypto assets (3 minute read)
New information has emerged regarding the attack on cross-chain bridge platform Poly Network on July 2, where a hacker was able to generate billions of tokens illicitly for personal gain. In a Twitter announcement, Poly Network confirmed that it had fallen victim to a DeFi exploit, with the attacker manipulating a smart contract function on the cross-chain bridge protocol, leading to the temporary suspension of services. In the latest update, the Poly Network team disclosed that the exploit affected 57 different cryptocurrencies across 10 blockchains, including popular ones like Ethereum, BNB Chain, Polygon, Avalanche, Heco, and OKx, as well as others such as Metis. While the exact amount stolen in the attack was not specified, Peckshield, a blockchain security company, previously reported that the hacker had transferred a minimum of $5 million worth of crypto assets.

Sam Altman's Worldcoin Integrates With Identity Management Software Okta as It Pushes Into Germany (2 minute read)
Worldcoin, the blockchain identity project co-founded by Sam Altman, CEO of OpenAI, revealed its integration with Okta and the launch of its identity protocol, World ID, in Germany. This means that users in Germany will have the opportunity to undergo full verification using specially designed hardware called Orbs, which utilizes biometric data. The Orbs will be made available throughout the country, with Berlin being the initial starting point. Okta, an identity and access management software provider, boasts "hundreds of millions of users" and has ambitions to reach billions.

AI-generated fake news sparks rumors of Gary Gensler’s resignation (2 minute read)
Once again, false rumors about the resignation of United States Securities and Exchange Commission (SEC) chair Gary Gensler have been making their rounds, but this time, it seems that AI may have played a role in spreading them. On July 1, an article surfaced on a website called "thecryptoalert.com," alleging that Gensler had tendered his resignation following an internal investigation, citing an anonymous source. However, upon investigation by Cointelegraph, it was discovered that the article exhibited characteristics indicative of AI-generated text, scoring 96.8% on the AI-detector ZeroGPT. Furthermore, the website itself appears to be relatively new, with only 17 published posts in total since its first appearance on June 22nd. It is noteworthy that most of these articles also exhibit signs of heavy AI utilization, with all of them scoring around 70% on ZeroGPT.

Misc

Kraken Ordered to Turn Over Its Users’ Information to the IRS (2 minute read)
Kraken has been instructed by a judge to provide a significant amount of user information to the IRS as part of the agency's investigation into potential tax evasion. The IRS is specifically seeking data on Kraken accounts that conducted cryptocurrency trading worth at least $20,000 in any single year between 2016 and 2020. Kraken had criticized the IRS's summons as an "unjustified treasure hunt," arguing that it exceeded the scope of a similar legal dispute involving Coinbase about six years ago. This ruling aligning with the government's position comes at a time when the United States is intensifying its scrutiny of the cryptocurrency industry.

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Last weeks Poll:

Do you use a hardware wallet?

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Wow, only 20% of you use a hardware wallet.

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