Jacquelyn Melinek

<div id="highlights-block_62014e15872d8" class="highlights">
 <ul>
 <li>“As the blockchain industry continues to evolve, it is proving its potential to support a digital ecosystem defined by accessibility, efficiency, and interoperability,” Aaron Wong, investor at SoftBank Investment Advisers, said in a statement</li>
 <li>The platform is planning to launch its mainnet later this year</li>
 </ul>
 
</div>



Aleo, a privacy-minded blockchain network, has raised $200 million in preparation for its mainnet launch later this year.



Aleo’s Series B funding round was led by Kora Management and SoftBank Vision Fund 2. Other participants include Tiger Global, Sea Capital, Slow Ventures, Samsung Next and Andreessen Horowitz, <a href="https://cms.blockworks.co/?s=a16z" target="_blank" rel="noreferrer noopener">a16z</a>.



Aaron Wong of SoftBank investment in a statement said the next generation of blockchain technology will be defined by “accessibility, efficiency, and interoperability.”



“We believe Aleo is building the foundational layer that will ensure that the future of Web3 is scalable, safe and secure, enabling a range of applications such as gaming and financial transactions,” Wong said.



The capital raise boosts the platform’s valuation to $1.45 billion, following its $28 million Series A <a href="https://www.bloomberg.com/press-releases/2021-04-20/aleo-raises-28m-to-launch-the-first-platform-for-fully-private-applications" target="_blank" rel="noreferrer noopener">led by</a> a16z in April 2021. As the platform works to launch its mainnet later this year, the funding will be used to develop products and services to build out an ecosystem on top of its decentralized network.



“The two biggest challenges in the blockchain space are privacy and scalability,” Daniel Jacobs, founder at Kora Management, said in a statement. “Aleo is building a foundational layer that addresses both, which we believe will help to catalyze and grow the next generation of truly mass-market use cases in blockchain, from gaming to DeFi and beyond.”



Unlike other blockchains like Ethereum, Aleo transactions are processed off-chain and only verified by the network nodes. The setup allows the platform to support high transaction volumes and empower developers to create decentralized applications, or dApps, that address complex use cases.&nbsp;



“Our goal at Aleo is to build the foundations for the next generation of decentralized web applications,” Howard Wu, CEO and chief technology officer of Aleo, said in a statement. “We want to use technologies, such as zero-knowledge proofs and blockchains, to create an ecosystem for developers that enriches and empowers users’ capabilities on the web.”



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Privacy-minded Blockchain Aleo Raises $200M Prior to Mainnet Launch

Sam Reynolds

<div id="highlights-block_6154ce289b428" class="highlights">
 <ul>
 <li>The SEC will neither confirm nor deny it served anyone at the Mainnet conference in New York</li>
 <li>Terra co-founder Do Kwon, and Ethereum co-founder and creator of Polkadot Gavin Wood both deny being served during the conference</li>
 </ul>
 
</div>



Did the Securities and Exchange Commission serve someone at the recent Mainnet Conference in New York? Maybe, maybe not.&nbsp;



That’s the response the Commission sent back to a Freedom of Information Act (FOIA) request filed by Blockworks in an attempt to answer the question. Ever since Indiegogo founder Slava Rubin tweeted during the conference that he saw someone being served before they went on stage for a speech crypto twitter has been abuzz with speculation as to whom it might be.&nbsp;



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</div></figure>



For the record, two prime suspects,  Terra co-founder Do Kwon, and Ethereum co-founder and creator of Polkadot Gavin Wood, have denied being served by the SEC in <a href="https://thedefiant.io/messari-sec/" target="_blank" rel="noreferrer noopener">statements to The Defiant</a>. While Rubin has remained adamant that he saw someone being served, it’s unclear if the person was being served by the SEC or if it was for an unrelated lawsuit or a personal manner. 



<h3>Neither yes nor no but GLOMAR</h3>



If the phrase “we can neither confirm nor deny” sounds like it comes from the world of espionage and spycraft, that’s because <a href="https://abcnews.go.com/US/cias-secret-history-phrase-confirm-deny/story?id=24033629" target="_blank" rel="noreferrer noopener">it was first coined by the CIA</a> in response to one of the first journalistic use cases of the then-new Freedom of Information Act. 



At the height of the Cold War in 1975 the <a href="https://www.pri.org/stories/2015-09-07/ship-built-cias-most-audacious-cold-war-mission-now-headed-scrapyard" target="_blank" rel="noreferrer noopener">CIA had contracted</a> deepwater drilling experts Global Marine to retrofit The Hughes Glomar Explorer to hunt for a sunken Soviet nuclear submarine. All of this had to be done without tipping off Moscow, so Langley devised a cover story involving billionaire Howard Hughes ocean mining for manganese nodules.



Journalists at the Los Angeles Times didn’t buy the story and started sleuthing. In response to their Freedom of Information requests the CIA responded with a “we can neither confirm nor deny” which was <a href="https://www.muckrock.com/news/archives/2014/feb/13/glomar-neither-confirm-deny-bizarre/" target="_blank" rel="noreferrer noopener">held up in court</a> upon challenge by the Times. Since then, GLOMAR has become a standard boilerplate response for government agencies whenever they deem that the request might contain, or lead to the discovery of, classified information.



<h3>But does the SEC Glomar?</h3>



The SEC has considerable interest in neither confirming nor denying journalists’ inquiries into its investigations. After all, even the presence of an investigation ⁠— that might end up empty handed anyway ⁠— could have a material impact on a listed companies’ share price.&nbsp;



Under the Freedom of Information Act, agencies have nine exemptions they can use to decline requests for information. One of them, Exemption 7, is used when disclosed information “could reasonably be expected to interfere with enforcement proceedings.”&nbsp;



An example of this being used in practice can be found with<a href="https://www.coindesk.com/markets/2018/06/06/cftc-denies-foia-request-for-bitfinex-and-tether-subpoenas/" target="_blank" rel="noreferrer noopener"> FOIA queries from 2018 </a>to the CFTC regarding the existence of subpoenas related to crypto exchange Bitfinex and its subsidiary Tether. In response, the CFTC said it had found &#8220;thousands of responsive records, all of which are exempt from the FOIA&#8217;s disclosure requirement.&#8221;



Of course, it doesn’t take someone at the top of the bell curve to deduce that this notice of exemption of disclosure is a notice of an investigation and, for a company, this would possibly be detrimental.&nbsp;



Legal researchers at Duke Law School <a href="https://sites.law.duke.edu/thefinregblog/2020/03/24/does-foia-foil-the-secs-intent-to-keep-investigations-confidential/" target="_blank" rel="noreferrer noopener">put this to the test last year</a> to determine what the SEC really means when it responds with a ‘GLOMAR’. The researchers found that there’s a good chance the SEC has no responsive records and doesn’t want to tip its hand. However, there is a substantial element of conditional probability attached to it so nothing is for sure. 



As Blockworks has previously reported, the <a href="https://cms.blockworks.co/the-sec-may-have-served-a-foreign-national-can-they-do-that/" target="_blank" rel="noreferrer noopener">SEC is perfectly within its legal remit</a> to serve foreign nationals and foreign companies. 



“Courts are generally favorable to jurisdictional expansion brought by regulators when the actions deal with US customers or interests. But this is hotly debated, as discussed in SEC v. Scoville, in which the 10th Circuit concluded Dodd-Frank abrogated the Morrison Rule, which was the previous standard for extraterritorial jurisdiction,” Kansas City-based securities lawyer and former CFTC enforcement attorney Braden Perry told Blockworks in an email. “The SEC is coming hard against crypto, and the new regime under Gary Gensler is showing it will be aggressive in its enforcement.”



But the question remains, if someone was served at Mainnet was it because of DeFi related enforcement action?



Has anyone checked if Kwon or Wood are getting divorced?

SEC Won’t Confirm Nor Deny it Served Anyone at Mainnet 2021

Casey Wagner

<div id="highlights-block_614b948f263ec" class="highlights">
 <ul>
 <li>The conversation came just a day after United States Securities and Exchange Commission Gary Gensler made headlines for his less than favorable view of the industry</li>
 <li>Cryptocurrencies are difficult from a regulatory standpoint because they do not neatly fit into the current framework in the US</li>
 </ul>
 
</div>



Mainnet 2021, New York City — Predictions about the regulatory future of the digital asset industry dominated the discussion on the final day of Messari’s Mainnet conference on Wednesday. 



Galaxy Digital CEO Mike Novogratz was joined by BitGo CEO Mike Belshe to discuss what comes next for the digital asset space and how to navigate the tumultuous regulatory landscape.&nbsp;



<blockquote class="wp-block-quote">&#8220;I think it&#8217;s gonna be a really volatile six to 12 months in the regulatory sphere. Our community did a terrible job of educating Washington on what our industry was and what&#8217;s important.&#8221;</blockquote>



The conversation came just a day after United States Securities and Exchange Commission Gary Gensler <a href="https://www.washingtonpost.com/washington-post-live/2021/09/21/path-forward-cryptocurrency-with-gary-gensler-us-securities-exchange-commission-chair/" target="_blank" rel="noreferrer noopener">made</a> headlines for his <a href="https://cms.blockworks.co/secs-gensler-stablecoins-are-poker-chips/" target="_blank" rel="noreferrer noopener">less than favorable</a> view of the industry. 



“Gary [Gensler] is smart, there&#8217;s absolutely no doubt about it. There&#8217;s absolutely also no doubt about it that he wants to regulate crypto,” said Novogratz. “He wants to be the sheriff of crypto.”



Cryptocurrencies are difficult from a regulatory standpoint because they do not neatly fit into the current framework in the US.&nbsp;



“You&#8217;ve got an issue as crypto is a new industry that doesn&#8217;t necessarily fall directly in the purview of the SEC or the CFTC, you can’t decide what&#8217;s the security, and if it’s not a security, can the SEC even regulate it?” said Novogratz. “What [Gensler] will try really hard for is to get this Democratic congress and Democratic Senate to pass legislation that gives him the right to regulate crypto.”



Belshe agreed, also pointing out that countries across the world are grappling with the same regulatory uncertainties. Blockchain technology that allows for cryptocurrencies to exist can also be applied to a variety of issues, he said.&nbsp;



“The rules that we have in place today, a lot of them were built a long time ago, they were built for a system that doesn&#8217;t have a blockchain,” said Belshe. “As we move forward as to how we&#8217;re going to do this next, we have a whole bunch of new tools that we haven&#8217;t had in the past, and I think the problems are getting figured out. So again, innovation I think is going to be the answer here.”&nbsp;



That being said, there is plenty of room for error, Novogratz warned. He echoed sentiments from previous Manniet speakers, including Robinhood Crypto COO Christine Brown, who <a href="https://cms.blockworks.co/robinhood-crypto-coo-regulation-should-not-be-the-only-thing-we-build/" target="_blank" rel="noreferrer noopener">said</a> that user needs will continue to be top of mind, regardless of regulatory guidelines. 



<blockquote class="wp-block-quote">“It certainly is a risk to our markets that we get really bad regulation,” said Novogratz. “It doesn&#8217;t kill the enterprise, but it certainly does slow down the adoption of crypto. And so it&#8217;s wildly important that we take this stone-cold seriously.”</blockquote>



Given the speed of adoption, Novogratz and Belshe said, it is important that a regulatory framework be established quickly.&nbsp;



“We&#8217;re literally growing one and a half to two times faster than the internet in terms of adoption,” Novogratz said. “You&#8217;d be an idiot, as a politician, an idiot, to say, ‘oh I don’t want that around.’”



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