The Weekly Roundup 🤠

GM Builders! 🚧 

Welcome back for a chill afternoon read of the BW3 newsletter— a Friday edition so good we saved it for Sunday 😂 

Here’s what we roped for you today:

• Weekly Roundup 📍 

• No Crypto Taxes in the UAE? 😮 

• Deal Flow Friday 💸 

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WEEKLY ROUNDUP 📍 

This past week in crypto has been packed with significant developments, ranging from regulatory battles to new integrations. Here’s the breakdown:

1. Regulatory and Legal News:

   • A U.S. judge partially sided with the SEC in its 2018 case against Opporty over unregistered securities. This decision continues to highlight the agency’s focus on pursuing enforcement actions within the crypto space.

   • Worldcoin hit a major hurdle in South Korea, getting fined for privacy violations related to its biometric data collection practices. The legal challenges continue to mount for Worldcoin globally.

2. Crypto Trading and Exchanges:

   • Binance faced challenges as its market share dipped to a four-year low, signaling potential struggles for the global exchange giant.

   • In contrast, Crypto.com saw a rise in trading volume, gaining ground in the competitive exchange landscape.

   • Meanwhile, U.S. spot Bitcoin ETFs experienced their largest weekly outflow in months, reversing previous trends of inflows.

3. Government Adoption:

   • Ohio made waves by proposing a bill allowing citizens to pay taxes using cryptocurrency, signaling growing acceptance of crypto at the government level.

CZ RELEASED FROM PRISON 🚨

Changpeng Zhao (CZ), the founder and CEO of Binance, was released from prison earlier this week after serving time related to violations of anti-money laundering regulations. His release sparked discussions across the crypto community, with some speculating on its potential impact on Binance’s future and the wider market.

While Binance has been navigating regulatory challenges, CZ’s return is seen by some as a bullish indicator, given his significant influence in the space. Still, Binance faces hurdles, with its market share dropping significantly—something to watch in the coming months as CZ steps back into the spotlight.

3AC REBRANDS? SAME PLAYERS, NEW GAME 🎲

Three Arrows Capital (3AC), once a major hedge fund in the crypto space before its infamous collapse during the 2022 bear market, is making moves again. Founders Zhu Su and Kyle Davies are rumored to be rebranding and launching new ventures, sparking a mix of skepticism and curiosity.

Despite their past, they seem to be betting on a fresh start, but the crypto community remains divided—some see this as an opportunity for redemption, while others fear it could be another high-risk venture destined for failure. With the past failures looming large, this rebranding is met with significant scrutiny.

EIGENLAYER UNLOCK FIASCO 💸

Let’s talk about the EigenLayer debacle this week. Despite their reputation for technical competence and securing over $5B in Total Value Locked (TVL), the team made a blunder during their token unlock.

Here’s the word on what happened:

Eigenlayer collected investor addresses weeks, maybe even months ago. Their $EIGEN token was supposed to be subject to a lockup period. Instead of using an existing token vesting protocol or even building their own vesting contract, they chose to distribute the tokens directly, simply asking investors not to sell.

Seems straightforward, right? Well, not quite.

One “investor” requested an address change, and without doing the necessary due diligence—no phone call, no extra verification—the team made the change.

The result? The scammer was actually the one who requested this address change and walked away with $6 million worth of tokens.

The incident has caused uproar, with many questioning how a project responsible for securing billions could make such a rookie mistake. This kind of misstep in token distribution has sent shockwaves through the community, leaving Eigenlayer under scrutiny.

That wraps up the biggest stories this week. Stay tuned for more updates as we track developments in the crypto world!

NO CRYPTO TAX IN THE UAE? 😮 

The UAE just made a bold move to attract even more crypto businesses by announcing value-added tax (VAT) exemptions on cryptocurrency transfers and conversions. Starting November 15, 2024, the exemption is expected to solidify the UAE’s reputation as one of the most crypto-friendly countries in the world. But that’s not all—these VAT exemptions will be retroactive to January 1, 2018, giving companies that have already been active in the space an unexpected bonus.

Here’s what you need to know:

• The UAE’s Federal Tax Authority (FTA) introduced the changes in Cabinet Decision No. (100) of 2024, which updates executive regulations related to VAT across multiple industries, including crypto.

• The exemptions apply not just to transfers and conversions of virtual assets, but also to managing investment funds and other crypto-related activities.

• PwC confirmed that crypto in the UAE is defined as a “representation of value that can be digitally traded or converted and can be used for investment purposes.” In simpler terms, crypto is officially seen as a tradable asset, free from VAT complications.

While countries like China and India are cracking down on crypto, the UAE continues to roll out the red carpet. The Dubai Virtual Assets Regulatory Authority (VARA) has been at the forefront of creating a favorable regulatory environment for virtual assets, and this latest tax move is set to bring even more businesses into the fold.

In fact, according to a Chainalysis report, the UAE received over $30 billion in crypto between July 2023 and June 2024, ranking it as the third-largest crypto economy in the MENA region. With venture capital funds and blockchain businesses growing steadily, the VAT exemption is just another reason why crypto firms are setting up shop in the Emirates.

It’s clear the UAE wants to be a global crypto hub—and they’re making moves to ensure it stays that way.

DEAL FLOW FRIDAY 💸

Only about $30M was raised since the last Deal Flow Friday…

Let’s break down the latest deals that hit the crypto and blockchain space since:

1. SecondLive (LIVE)

   • Funding Round: Private

   • Amount Raised: $12M

   • Category: Metaverse, NFT, BNB Chain Ecosystem

   • Investors: Crypto.com, Spark Capital, Cypher Ventures

   • Overview: SecondLive continues to expand its foothold in the metaverse and NFT space, operating within the BNB Chain ecosystem. With new funding, they’re pushing further into virtual experiences and marketplace development.

2. RD Technologies (HKDR)

   • Funding Round: Series A

   • Amount Raised: $7.80M

   • Category: Finance/Banking, Payment, Wallet, Stablecoin

   • Investors: HongShan, Hivemind, Aptos Labs

   • Overview: Specializing in payment and wallet technology, RD Technologies raised a substantial Series A to scale their finance and banking solutions, especially within the realm of stablecoins.

3. LAYER

   • Funding Round: Seed

   • Amount Raised: $6M

   • Category: Ethereum Ecosystem, Infrastructure, L2

   • Investors: 1kx, Fabric Ventures, Arrington Capital

   • Overview: Layer is positioning itself to be a critical infrastructure provider within Ethereum’s L2 ecosystem. This seed funding will help boost their efforts to build scalable Ethereum solutions.

4. Initia (INIT)

   • Funding Round: Private

   • Amount Raised: $2.50M

   • Category: Cosmos Ecosystem, Infrastructure, L1

   • Investors: The Economist, Delphi Ventures, Hack VC

   • Overview: Initia, a Cosmos-based Layer 1 blockchain, secured funding to expand its infrastructure and attract projects looking for scalability within the Cosmos ecosystem.

5. Synnax Technologies

   • Funding Round: Unknown

   • Amount Raised: $1.55M

   • Category: Analytics, Data Service

   • Investors: Wintermute, TON Ventures

   • Overview: Specializing in data analytics services, Synnax Technologies is using this funding to scale up its operations and enhance its data processing capabilities across blockchain networks.

That’s the top deal flow from this week. As these projects progress, they’ll likely play critical roles in shaping the future of blockchain infrastructure, the metaverse, and payment systems!

Other Action:

Matrixport, a Singaporean crypto financial services firm, completed an all-cash acquisition of Crypto Finance (Asset Management) AG, a crypto asset manager in Switzerland. Financial terms were not disclosed.

Initia raised $2.5M through Cobie’s Echo platform. The raise was a SAFE + token warrant round completed at a $250M valuation.

Amlyze, a financial risk analysis startup catering to fintechs, neo-banks, FIUs, and regulators raised $2.45M. Practica Capital led the round, with investors FIRSTPICK, Coinvest Capital, participating along with a large group of angel investors.

Binance Labs invested an undisclosed amount in Sophon, a L2  network built on ZKsync’s modular technology, ahead of its mainnet launch. Sophon is a ZKsync “elastic chain” being built using Matter Labs’ open-source framework, Stack.

MEME CITY 🏙️ 

Until next time, Builders! 🏗️ 

Keep shipping and avoid the dipping. 🦕