Bessie Liu

This week, $254 million was committed to the cryptocurrency ecosystem, up from the $183 million poured into the space last week.



A total of 25 companies received funding, with decentralized finance, gaming and blockchain infrastructure companies receiving particular attention.



Chain Reaction



Israeli semiconductor and blockchain privacy company Chain Reaction has secured $70 million in a Series C funding round led by Morgan Creek Digital.



Hanaco Ventures, Jerusalem Venture Partners, KCK Capital, Exor, Atreides Management, and BlueRun Ventures also participated in the round.



“Blockchain is the key to securing democracy, decentralization, and freedom, but it is compute-intensive,” Mark Yusko, chief executive officer of Morgan Creek Capital Management said in a statement. “Chain Reaction&#8217;s products will shore up the value of predominant blockchain technologies and revolutionize use-cases for blockchain technologies in the not-so-distant future.&#8221;



This new round of funding will bring the total amount of cash secured by the company to $115 million. The Tel Aviv-based company plans to use the fresh capital to expand its engineering and development teams.&nbsp;



Here Not There



Here Not There has received $25.5 million in a series A led by prominent venture capital firm Andreessen Horowitz (a16z) to build Towns, a decentralized group chat protocol and app. Benchmark and Framework Ventures also participated in the round.&nbsp;



The company was founded by Brian Meek, the former CTO of STRIVR Labs and GM of Engineering at Skype and Ben Rubin, the founder of Houseparty — a popular game and video chatting app that was widely used during the 2020 pandemic.



Towns, like many other decentralized communication protocols, enables end-to-end encrypted conversations. Users are able to gather in “towns” where they can set boundaries — without worrying that third-party organizations will take away their rights.



“The team’s vision for creating a digital town square where members can define the borders, set the rules, and build the world they want is an ambitious goal that is uniquely achievable through the promise of decentralization and web3,” Sriram Krishnan, general partner at a16z said in a comment shared with Blockworks. 



Chaos Labs



Chaos Labs, a company dedicated to blockchain security, has secured $20 million in a funding round co-led by PayPal and Galaxy Digital.



Coinbase, Uniswap, Lightspeed, Bessemer, Hashkey and a handful of angel investors also participated in the round.



The risk management platform — which has worked with prominent DeFi industry players including Aave, Chainlink, Uniswap, BENQI, and Osmosis — will use the funding to continue building out risk and security products to help secure the DeFi ecosystem.



“We believe that every DeFi protocol must regularly conduct robust risk testing to verify and validate that their economic system is secure against hackers and unanticipated volatility,” ​​ Omer Goldberg, the chief executive officer of Chaos Labs said in a statement. “We&#8217;re working to solve for this by bringing world-class security and risk practices in running simulations of millions of economic scenarios on-chain.&#8221;



As the DeFi ecosystem continues to grow, it will be vital that security remains a top priority to ensure more mainstream adoption.



Other notable funding stories this week:



<ul>
<li>​​India-based web3 gaming company Kratos Studios landed $20 million in a seed funding round led by Accel, reaching a valuation of $150 million.</li>



<li>Order book-based decentralized exchange Mangrove landed $7.4 million in a series A led by Cumberland and Greenfield Capital.</li>



<li>On-chain gaming lab Curio landed $2.9 million in a seed round led by Bain Capital Crypto.</li>
</ul>



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Crypto Funding: PayPal, Morgan Creek, a16z Lead Major Rounds

Shalini Nagarajan

Chaos Labs, a risk management platform for DeFi protocols, raised $20 million in seed funding from industry heavyweights.



The round was led by Galaxy and PayPal Ventures, including participation from Coinbase, Uniswap, Lightspeed, Bessemer and angel investors Balaji Srinivasan and Naval Ravikant.



Chaos’ fundraising comes after a <a href="https://blockworks.co/news/the-nine-largest-crypto-hacks-in-2022">record year of crypto-related hacks</a>, including the <a href="https://blockworks.co/news/sky-mavis-ronin-network-bridge-exploited-for-over-600m">Ronin Bridge attack</a> and the <a href="https://blockworks.co/news/mango-markets-mangled-by-oracle-manipulation-for-112m">Mango Markets exploit</a>. The New York-based startup says it was founded to solve such security issues and to secure protocols against vulnerabilities and market manipulation.



“As the world moves from the opacities of traditional finance to a more open DeFi system, financial risk management must advance accordingly,&#8221; CEO Omer Goldberg said in a statement.&nbsp;



“At Chaos Labs, we believe that every DeFi protocol must regularly conduct robust risk testing to verify and validate that their economic system is secure against hackers and unanticipated volatility.”



Chaos claims its risk suite can boost DeFi protocol security through preventative measures and monitoring tools. It provides teams with protocol-specific simulation models to test attack strategies and find their applicability and profitability. Clients also have the option to receive suggestions on certain tactics that can be implemented in response to a hack.



Goldberg recently <a href="https://fortune.com/crypto/2023/02/21/chaos-labs-omer-goldberg-20m-seed-funding-mango-markets/" target="_blank" rel="noreferrer noopener">claimed</a> that Chaos’ software could’ve prevented the Mango Markets hack, which drained the platform of $114 million. Chaos already counts some of the most recognized DeFi players among its clients including Aave, dYdX, Osmosis and Chainlink.



Goldberg himself ventured into the crypto space in 2012, getting his first payment in bitcoin for working as a contractor, per a recent company <a href="https://chaoslabs.xyz/posts/chaos-labs-story" target="_blank" rel="noreferrer noopener">blog</a>. Between 2018 and 2020, he left the industry and went on to work as a tech lead at the Massachusetts Institute of Technology, Facebook and Instagram.



“In early 2021, I left my engineering role at Instagram to focus full-time on building in DeFi. With DeFi summer&#8217;s innovation and wave of attractive yields, I saw an opportunity to actively provide liquidity through automated smart contracts. However, with optionality comes risk, and DeFi has much of that,” Goldberg said.



Chaos’ teams are based in New York and Tel Aviv, and are made up of engineers from ex-FAANG companies and former members of the Israeli military.



The funds most recently raised will be used to hire people across its business units, expand the platform’s offerings and build out its suite of risk and security products.



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DeFi Exploit Protector Raises $20M Round Co-led by PayPal

Ornella Hernandez

ConsenSys announced a new on-ramp to Ethereum via a feature to integrate PayPal purchases of ether on MetaMask’s mobile app, with a browser integration targeting the first quarter of 2023.



The mobile MetaMask app wallet developer plans to <a href="https://consensys.net/blog/press-release/consensys-teams-with-paypal-for-a-new-way-to-buy-crypto-in-metamask/" target="_blank" rel="noreferrer noopener">enable</a> a select number of US users to fund their wallets with ether (ETH) by transferring ETH they hold on PayPal or by purchasing the cryptoasset using Paypal-linked bank accounts. 



Eligibility will be increased to all US customers “in the coming weeks” ConsenSys said in a blog post.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Our US users will now be able to fund their wallet with ETH via <a href="https://twitter.com/PayPal?ref_src=twsrc%5Etfw">@PayPal</a>! 🦊 Rolling out in the next weeks in the US, excl. Hawaii, through our mobile app (make sure to update to v5.13.0)🧵👇<a href="https://t.co/392JwFYF3m">https://t.co/392JwFYF3m</a>&mdash; MetaMask 🦊💙 (@MetaMask) <a href="https://twitter.com/MetaMask/status/1603087496182743040?ref_src=twsrc%5Etfw">December 14, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



PayPal has allowed users to buy, sell and hold crypto since 2020 and to “<a href="https://newsroom.paypal-corp.com/2021-03-30-PayPal-Launches-Checkout-with-Crypto" target="_blank" rel="noreferrer noopener">check out with crypto</a>” for online purchases using bitcoin, ether, litecoin and bitcoin cash since 2020.



Last week, PayPal competitor <a href="https://blockworks.co/news/stripe-enables-crypto-on-ramp" target="_blank" rel="noreferrer noopener">Stripe launched its own fiat-to-crypto on-ramp</a>, allowing customers to exchange dollars for cryptocurrencies. 



Existing on-ramps for users who tap the buy button on the MetaMask app include instant bank transfer, Apple Pay, or a debit or credit card. Soon PayPal will be an additional option. MetaMask’s 1% service fee is applied to purchases, according to the company.



A Web3 company founder Adam Hollander <a href="https://twitter.com/HollanderAdam/status/1603144439429464065?s=20&amp;t=uPfkdJ4P1O-dpD7fxETUUg" target="_blank" rel="noreferrer noopener">tweeted</a> that this PayPal&#8217;s new feature “knocks down a meaningful barrier to entry for NFTs.” 



ConsenSys recently <a href="https://blockworks.co/news/consensys-update-data-practices-privacy-backlash" target="_blank" rel="noreferrer noopener">came under fire for updates to its privacy policy</a> in connection with two of its core products — MetaMask and Infura — when the company said last month that collecting and storing users’ wallet and IP addresses was standard, alarming many of its customers.



The company later backtracked, stating that it will only hold user wallet and IP addresses for one week after a transaction is made.&nbsp;



Regarding the new PayPal partnership, MetaMask’s product manager Lorenzo Santos told Blockworks that “MetaMask never collects or processes KYC [know-your-customer] data or payment details.” He views the integration as an opportunity to onboard hundreds of millions of users to Web3 who have already entrusted their payment details to PayPal.



While the Web3 and crypto community has been hesitant to adopt KYC processes on privacy grounds, many money services businesses, including US-regulated centralized exchanges such as Coinbase, require it.



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MetaMask Mobile Users Can Now Buy ETH Using PayPal

<div id="highlights-block_62a3a956a4c8e" class="highlights">
 <ul>
 <li>Regulation will be critical for cryptocurrency adoption, PayPal CEO says</li>
 <li>Underserved communities are most likely to benefit from the development of blockchain technology</li>
 </ul>
 
</div>



The future of our financial system is being redesigned in front of our eyes, PayPal CEO Dan Schulman said at CoinDesk&#8217;s Consensus 2022. Rethinking the underlying rails of the existing financial system by taking out intermediaries, so that money can be moved faster and cheaper, has the potential to provide a more inclusive future.



The multinational online payments platform <a href="https://cms.blockworks.co/paypal-enables-crypto-transfers-to-external-wallets-exchanges/" target="_blank" rel="noreferrer noopener">recently enabled</a> its customers to transfer cryptocurrencies from its app to external wallets and exchanges. 



“We built a bridge between the fiat universe and the crypto universe,” said Jose Fernandez da Ponte, the company’s general manager for blockchain, crypto and digital currencies. Consumers will now have access to the wider Web3 network through their PayPal wallets, Fernandez da Ponte said at the conference.



<h3>Addressing the volatility of cryptocurrencies</h3>



Cryptocurrency is more volatile than many mainstream markets, and consequently, some fund managers have <a href="https://www.cnbc.com/2022/02/14/most-investment-execs-dont-think-clients-should-own-crypto-survey.html#:~:text=68%25%20of%20investment%20execs%20don,should%20own%20crypto%2C%20survey%20finds&amp;text=Sixty%2Deight%20percent%20of%20%22fund,a%20Natixis%20Investment%20Managers%20survey." target="_blank" rel="noreferrer noopener">urged consumers</a> to not invest in cryptocurrencies. 



Schulman says the key to managing market volatility is to have regulators protecting consumers. “Doing responsible innovation with the blessing of regulators is extremely important,” Schulman said. “You may not want it to be that way, but it has to be that way in order to evolve.”



Many people who sit outside the existing financial system or are underserved by the financial system are likely to benefit from money being moved on blockchain rails, Schulman said. Although Schulman believes that PayPal is not yet serving these communities, he is optimistic that it will.



<blockquote class="wp-block-quote">“We are playing the long game, but you’re going to start seeing some significant changes over the next five years.”</blockquote>



Fernandez da Ponte says he is most excited about three things in the coming years: NFTs, stablecoins and digital identity.



As NFTs (non-fungible tokens) move to become a digital property right, they will gain a significant number of use cases, Fernandez da Ponte said. “Now I have a way to prove that I own something on-chain, that is a very significant development that we will see in the future.”



In the case of stablecoins, he believes merchants desiring large-scale sales operations must be willing to use digital currency — stablecoins could provide reliability for these future transactions. “I think we are close to having stablecoins at scale.”



Finally, digital identity will be critical to “prove who you are.” Despite the “really great work being done by the community, that one is probably a little bit further out,” Fernandez da Ponte said.



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PayPal Exec Excited About NFTs, Stablecoins and Digital Identity

<div id="highlights-block_62a075457a2ad" class="highlights">
 <ul>
 <li>Select US users can transfer bitcoin, ethereum, bitcoin cash and litecoin to other wallets and exchanges</li>
 <li>Sending crypto outside of PayPal carries a fee determined by network congestion</li>
 </ul>
 
</div>



PayPal users can now transfer cryptocurrencies including bitcoin and ether to third-party wallets and exchanges, nearly two years after the payments giant opened up its platform to digital assets, the company announced on Tuesday.



Currently available to select US users, the feature will be extended to eligible US customers in the coming weeks, according to the <a href="https://newsroom.paypal-corp.com/2022-06-07-PayPal-Users-Can-Now-Transfer-Send-and-Receive-Bitcoin-Ethereum-Bitcoin-Cash-and-Litecoin" target="_blank" rel="noreferrer noopener">announcement</a>.



The San Jose, California-based company first began allowing customers to <a href="https://newsroom.paypal-corp.com/2020-10-21-PayPal-Launches-New-Service-Enabling-Users-to-Buy-Hold-and-Sell-Cryptocurrency" target="_blank" rel="noreferrer noopener">buy, hold and sell</a> bitcoin, ether, bitcoin cash and litecoin in October 2020. But they had no option to move out their holdings from the platform to crypto wallets such as MetaMask and Electrum, or exchanges such as Coinbase.



This feature was one of the most requested updates since the purchase of cryptocurrencies were allowed, PayPal said, and executives had been discussing its implementation for a year.



Now users will be able to move their cryptocurrency from PayPal to other crypto addresses, including hardware wallets — and send crypto to family and friends for free within the same payments network. Sending cryptocurrency outside of PayPal carries a fee, which may fluctuate depending on network congestion.


<div class="wp-block-image">
<figure class="alignright is-resized"><a href="https://lh3.googleusercontent.com/JgSA8dGIUX2lsgumZ5P1vEALBga8bun-aGC85F9isEqWuG9qMPfwKRn1qx0osQGfM16IoxrcIylvVL1bpu-8cedE-dswKommurHldMNLXArR55a-aH64IvtPrhfUrHb4Ksxk-yB2oG1bu7Qfuw" target="_blank" rel="noreferrer noopener"><img decoding="async" loading="lazy" src="https://lh3.googleusercontent.com/JgSA8dGIUX2lsgumZ5P1vEALBga8bun-aGC85F9isEqWuG9qMPfwKRn1qx0osQGfM16IoxrcIylvVL1bpu-8cedE-dswKommurHldMNLXArR55a-aH64IvtPrhfUrHb4Ksxk-yB2oG1bu7Qfuw" alt="The fintech giant first enabled crypto buying and selling in late 2020, but users couldn’t transfer their assets to third-party wallets" width="395" height="205"/></a></figure></div>


The capability still applies only to bitcoin, ethereum, bitcoin cash and litecoin.



PayPal’s announcement carries weight, as the fintech giant has more than 426 million active users who use the network to transfer money around the world and to make payments to merchants.



In March last year, PayPal rolled out the ability for US customers to use crypto as a form of payment to merchants using its “<a href="https://newsroom.paypal-corp.com/2021-03-30-PayPal-Launches-Checkout-with-Crypto" target="_blank" rel="noreferrer noopener">Checkout with Crypto</a>” service.&nbsp;



“We will continue to roll out additional crypto features, products, and services in the months ahead,” Jose Fernandez da Ponte, general manager of blockchain, crypto and digital currencies at PayPal, said in a statement.



Dan Schulman, PayPal’s president and CEO, revealed last year the firm’s <a href="https://cms.blockworks.co/paypal-ceo-smart-contracts-defi-apps-part-of-companys-crypto-plans/" target="_blank" rel="noreferrer noopener">crypto capabilities</a> will expand into the use of central bank digital currencies and smart contracts.&nbsp;



Some of PayPal’s revenue stems from crypto purchases made on its platform, but the exact amount isn’t clear because the company excludes this figure from its total payment volume.



Venmo, a popular payments app owned by PayPal, supports the buying and selling of cryptocurrencies but doesn’t yet have the ability to transfer them externally. 



As for Robinhood, the trading app rolled out a <a href="https://cms.blockworks.co/robinhood-deploys-beta-crypto-wallets-allowing-select-customers-to-transfer-off-platform/" target="_blank" rel="noreferrer noopener">beta version</a> of its crypto wallet to 1,000 customers that allowed them to transfer digital assets to other crypto wallets for the first time in January. It later opened the feature to <a href="https://cms.blockworks.co/robinhood-opens-crypto-wallet-service-to-2-million-more-users/" target="_blank" rel="noreferrer noopener">2 million</a> more “eligible” users — <a href="https://blog.robinhood.com/news/2022/3/28/the-future-of-investing-is-247-s8ksg" target="_blank" rel="noreferrer noopener">excluding</a> those in New York, Hawaii and Nevada, due to regulatory hurdles.



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PayPal Enables Crypto Transfers to External Wallets, Exchanges

Ben Strack

<div id="highlights-block_6206b99ef5797" class="highlights">
 <ul>
 <li>PayPal finalized its new crypto advisory council</li>
 <li>21Shares, the largest issuer of cryptocurrency ETPs, hired three senior sales pros to enlarge its US footprint</li>
 </ul>
 
</div>



Bitcoin mining and crypto tech company Bitfury has hired Jonathan Gould as its chief legal officer in the latest instance of a government official to join a crypto firm.



Gould most recently worked as senior deputy comptroller and chief counsel at the US Office of the Comptroller of the Currency (OCC). Before that, he was chief counsel of the US Senate Banking Committee.



Crypto.com has hired Giuseppe Giuliani, previously global head of institutional relationships and services at Kraken, as managing director of the company’s exchange. He will look to expand into new markets and introduce new offerings for institutional investors.



Ken Timsit has been named managing director for the Cronos blockchain. He was formerly chief revenue officer in charge of global sales and marketing at blockchain technology company ConsenSys.



Cronos supports both Ethereum and Cosmos technology, including DeFi, NFTs and metaverse technologies. Timsit will help the blockchain firm scale its DeFi (decentralized finance) and Web3 business by equipping developers with the resources to instantly port apps and crypto assets from other chains.



Sébastien Badault joined digital assets platform Ledger as its vice president of metaverse and Web3. He will oversee the company’s NFT (non-fungible token) division, plus gaming and brand collaborations.



Badault was previously a managing director at Alibaba and also spent more than 10 years at Google, where he ran the company’s French operations. Before Google, he led Amazon’s customer and partner acquisition strategy across the UK, Germany and France.



Crypto prime brokerage FalconX has hired former Carta chief people officer and Bloomberg head of talent Suzy Walther as its head of people, amid a push to fill hundreds of roles across engineering, marketing, HR and customer support.



The company, which <a href="https://cms.blockworks.co/falconx-coindcx-hit-unicorn-status-amid-uncertain-regulatory-environment/" target="_blank" rel="noreferrer noopener">raised</a> $210 million in August, has also hired Sujay Jaladi as its new vice president of security. He was previously chief information security officer at Gusto, Ripple, Harbor, Inc., Earnin and PayPal subsidiary Xoom.



&#8220;Institutional adoption of cryptocurrencies continues to cement the notion that the world&#8217;s economy will be tokenized in 5 to 7 years,&#8221; FalconX CEO Raghu Yarlagadda said in a statement.



TaxBit, a tax and accounting solution for the tokenized economy, hired Nathan Jones as senior vice president of worldwide public sales and government affairs. Jones has worked the last 19 years at IBM subsidiary Red Hat.



The company also brought aboard Miles Fuller as head of government solutions, plus Christi Muoneke as corporate general counsel.



Fuller joins TaxBit after a 15-year stint with the IRS, where he worked in a senior legal role. Muoneke previously spent more than 15 years working at Meta, DocuSign, Microsoft and Avalara.



Charlie Hu, former head of Polygon China, has joined Syscoin, a decentralized, open-source project created in 2014 by the founders of Blockchain Foundry.



As an ecosystem advisor, he will help drive the company’s expansion into untapped markets. While at Polygon, he focused on business development in Asia.&nbsp;



Marathon Digital appointed Raymond Walintukan as vice president of mining operations. He previously served as chief operating officer of Apifiny subsidiary Hash Hive. Before that, he served as the head of operations at Bitmain North America.



The hire comes as Marathon seeks to grow from 3.6 exahashes per second (EH/s) at the start of February to 23.3 EH/s by early next year.



PayPal brought aboard specialists in cryptography, distributed technology, regulation, economics and capital markets to establish a crypto advisory council.



The council includes Peter Briger, Jr., co-CEO of Fortress Investment Group; Chris Brummer, a Georgetown University law professor and faculty director of the Institute of International Economic Law; Dr. Shafi Goldwasser, director of the Simons Institute for the Theory of Computing at the University of California, Berkeley; Timothy Massad, an ​​adjunct law professor at Georgetown University and research fellow at Harvard Kennedy School; Dr. Neha Narula, director of MIT Digital Currency Initiative; and Antoinette Schoar, a finance professor at MIT Sloan School of Management.



Former Domino’s Pizza President Kory Spiroff joined the advisory board of FriesDao.



Spiroff is tasked with bridging real-world operations with blockchain-based governance. FriesDAO plans to acquire and build on-chain membership around popular fast food franchises.



Metaplex Studios, a US organization working to advance Solana NFT protocol Metaplex, tapped Stephen Hess as its CEO.



21Shares, the largest issuer of cryptocurrency ETPs, has hired three senior sales professionals to boost US growth.



Hires include Kayle Watson as US head of sales; Aram Babikian, who will lead US west coast and Latin America business development; and Ches Snider as US head of research sales.



The executives combined have decades of traditional finance experience at firms such as BlackRock, Bear Stearns, Goldman Sachs and Guggenheim Securities.



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The Latest in Crypto Hiring: PayPal, Crypto.com Add to Digital Assets Headcount

Luke Conway

<div id="highlights-block_61f169ffc3148" class="highlights">
 <ul>
 <li>Meta’s Diem Association, formerly known as Libra, has been plagued by regulatory and social backlash</li>
 <li>The association n is seeking to sell assets to pay back investors, sources familiar with the matter reportedly say </li>
 </ul>
 
</div>



Meta’s (formerly Facebook) “Diem” stablecoin cryptocurrency project seems to be crumbling after years of social and regulatory pressures, Bloomberg <a href="https://www.bloomberg.com/news/articles/2022-01-25/zuckerberg-s-stablecoin-ambitions-unravel-with-diem-sale-talks" target="_blank" rel="noreferrer noopener">reported</a>. The project, formerly known as Libra, is reportedly seeking to sell its assets in order to return capital to investors and association members. 


[stock_market_widget type=&#8221;accordion&#8221; template=&#8221;chart&#8221; color=&#8221;#5679FF&#8221; assets=&#8221;FB&#8221; start_expanded=&#8221;false&#8221; display_currency_symbol=&#8221;true&#8221; api=&#8221;yf&#8221; chart_range=&#8221;1mo&#8221; chart_interval=&#8221;1d&#8221;]



Facebook’s Libra cryptocurrency was slated to launch in 2019, but backlash from regulators forced the association to hold off until it received appropriate <a href="https://www.banking.senate.gov/imo/media/doc/Marcus%20Testimony%207-16-19.pdf" target="_blank" rel="noreferrer noopener">approvals</a>. In October 2019, several companies, including PayPal, eBay, Mastercard and Stripe, left the Libra Association, increasing doubt that the project would ever work. 



In a <a href="https://www.theguardian.com/technology/2019/oct/07/paypal-pulls-out-facebook-libra-cryptocurrency#:~:text=It%20said%20in%20a%20statement,financial%20services%20for%20underserved%20populations." target="_blank" rel="noreferrer noopener">statement</a> from 2019, PayPal noted why it was leaving the project:



<blockquote class="wp-block-quote">&#8220;PayPal has made the decision to forgo further participation in the Libra association at this time and to continue to focus on advancing our existing mission and business priorities as we strive to democratize access to financial services for underserved populations.&#8221;</blockquote>



Since then, PayPal has made its own <a href="https://newsroom.paypal-corp.com/2020-10-21-PayPal-Launches-New-Service-Enabling-Users-to-Buy-Hold-and-Sell-Cryptocurrency" target="_blank" rel="noreferrer noopener">entry</a> into the cryptocurrency space, letting its users buy, sell and hold cryptocurrency on its platform. 



Concern over the Diem project stemmed from both Facebook’s history with data and also the fact that Libra would be a permissioned and private system that could potentially undermine existing monetary systems should it become popular. 



After so much backlash from regulators, the Libra Association <a href="https://www.diem.com/en-us/updates/diem-association/" target="_blank" rel="noreferrer noopener">changed</a> its name to the Diem Association in 2020, just as Facebook would later change its name to Meta after becoming synonymous with unethical data practices.



The new version of Diem would also depart from its prior concept of a stablecoin backed by the International Monetary Fund&#8217;s SDR, a basket of top currencies including USD, EUR, CNY, JPY and GBP, and instead use a USD-only backed stablecoin issued by a major bank. But Diem couldn&#8217;t seem to shake the regulatory and social pressures.



To add more uncertainty to the project, Diem&#8217;s head David Marcus, announced his departure from Meta and Diem through a series of Tweets in November of last year. 



<figure class="wp-block-embed aligncenter is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Personal news: after a fulfilling seven years at Meta, I’ve made the difficult decision to step down and leave the company at the end of this year. (1/7)&mdash; David Marcus &#8211; dmarcus.eth (@davidmarcus) <a href="https://twitter.com/davidmarcus/status/1465740041339092994?ref_src=twsrc%5Etfw">November 30, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Sources say that it is unclear whether or not Diem will find a buyer for its assets, a third of which is owned by Meta.



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Is Facebook’s Diem Stablecoin Falling Apart?

Casey Wagner

<div id="highlights-block_6189a716f5a0e" class="highlights">
 <ul>
 <li>The company reported growth in its Cash Back to Crypto program</li>
 <li>PayPal recently announced that it will allow UK customers to buy, hold and sell cryptocurrency and access the Cash Back to Crypto program</li>
 </ul>
 
</div>



PayPal reported a 13% increase in revenue for the third quarter of 2021 and emphasized plans to increase cryptocurrency offerings Monday.&nbsp;



The payments provider beat on earnings per share, <a href="https://s1.q4cdn.com/633035571/files/doc_financials/2021/q3/Q3-21-PayPal-Earnings-Release.pdf" target="_blank" rel="noreferrer noopener">reporting $1.11</a>, adjusted, for the quarter versus the expected $1.07 analysts expected. PayPal however missed on revenue, reporting $6.18 billion versus expected $6.23 billion. 



PayPal recently announced that it will allow UK customers to buy, hold and sell cryptocurrency and access the Cash Back to Crypto program. The company reported growth in its Cash Back to Crypto program, launched in August, which allows Venmo Credit Card users to automatically purchase digital assets from their Venmo accounts using cashback earned from card purchases.&nbsp;&nbsp;



“Our rapid pace of innovation continues,” said John Rainey, CFO and executive vice president of global customer operations, during the earnings call Monday. “We had an exciting cadence of product introductions, including our new digital wallet apps for both PayPal and Venmo and the launch of crypto by wholesale in the UK.”&nbsp;&nbsp;



PayPal’s Venmo app reported a payment volume increase of 36% to $60 billion. The app began supporting cryptocurrency services in the beginning of the second quarter of 2021. The company also announced that customers will be able to use Venmo for purchases made on Amazon.com and on the Amazon mobile shopping app starting next year.&nbsp;



PayPal hinted that the company would expand its reach into the <a href="https://cms.blockworks.co/paypal-ceo-smart-contracts-defi-apps-part-of-companys-crypto-plans/" target="_blank" rel="noreferrer noopener">cryptocurrency space in July</a>, including work to help the development of a central bank digital currency. 



PayPal’s new app has been very successful, Dan Schulman, president and CEO of PayPal, said during Monday’s earnings call.&nbsp;



The app has led to “a 15% increase in first-time users transacting with crypto and it has also driven a 35% lift in our cash card enrollments,” he said.



<hr class="wp-block-separator"/>



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<hr class="wp-block-separator"/>

PayPal Reports 13% Revenue Increase, Plans to Increase Crypto Offerings

Morgan Chittum

<div id="highlights-block_60c9fc7f1690b" class="highlights">
 <ul>
 <li>Visa bought its first CryptoPunk for $150,000 in ether, benchmarking the payment processor as the first to start an NFT collection</li>
 <li>Paypal Holdings expanded its crypto-related services into the United Kingdom, the company announced on Monday</li>
 </ul>
 
</div>



Bitcoin hit a three-month high on Monday morning, trading above $50,000 for the first time since May.



To recap, the largest crypto by market capitalization hit an all time high of $64,654.15 on April 14. The asset shed around 43% from the coin’s ATH to roughly $28,000 in July.



Volatile trading sessions ensued following various Chinese <a href="https://cms.blockworks.co/china-expands-2017-crypto-ban-to-include-defi-savings-accounts/" target="_blank" rel="noreferrer noopener">regulatory clampdowns</a> which range from a ban on bitcoin mining, to any transaction/holding of the digital asset class at-large. (Not to mention a string of bullish news of <a href="https://cms.blockworks.co/jpmorgan-reportedly-to-allow-clients-to-access-crypto-funds/" target="_blank" rel="noreferrer noopener">institutional adoption</a> and more.)



Despite a months-long downtrend the crypto has since gotten its footing. BTC has a return on investment (ROI) of around 43.56% in the past 30 days, according to Messari. Ethereum has a ROI of 51.49% in the same timeframe.



Ethereum continues to rise on the coattails of the non-fungible token gravy train. On Monday, Visa announced its purchase of <a href="https://www.larvalabs.com/cryptopunks/details/7610" target="_blank" rel="noreferrer noopener">CryptoPunk #7610</a> for $150,000 in ethereum, benchmarking the payment processor as the first to start a NFT collection. Digital asset bank Anchorage facilitated the transaction, Blockworks <a href="https://cms.blockworks.co/visa-steps-into-the-metaverse-with-first-nft-purchase/" target="_blank" rel="noreferrer noopener">reported</a>. Visa’s Head of Crypto Cuy Sheffield said CryptoPunk is a “cultural icon for the crypto community.&#8221;&nbsp;



Altcoins like Cardano continue to rise 11% after hitting an ATH of $2.52 on Friday. On Monday, the ADA was trading at $2.88 as or press time.&nbsp;



Investors are eyeing The Federal Reserve’s Jackson Hole Economic Symposium (now a virtual event) starting on Thursday for signals of future tapering or interest rate hikes. Bitcoin continues to rise on a depreciating dollar. 



<h3>DeFi</h3>



<ul><li>Uniswap is trading at $28.90 with a total value locked of $4,833,170,999 up 4.6% in 24 hours at 4:00 pm ET.&nbsp;</li><li>Chainlink is trading at $28.55, advancing 4.9% with trading volume at $1,466,917,748 in 24 hours at 4:00 pm ET.</li><li>DeFi:ETH is 33.2% at 4:00 pm ET. </li></ul>



<h3>Crypto</h3>



<ul id="block-1209f037-00c3-4876-ad37-a29ab610c717"><li>Bitcoin is trading around $49,308.52, up 1.23% in 24 hours at 4:00 pm ET.</li><li>Ether is trading around $3,320.03, advancing 4.49% in 24 hours at 4:00 pm ET.</li><li>ETH:BTC is at 0.067, up 3.02% at 4:00 pm ET.</li><li>VIX is down -8.41% to 17.00 at 4:00 pm ET.</li></ul>



<h3>Insight</h3>



Ulrik K.Lykke Executive Director at crypto/digital assets hedge fund <a href="https://ark36.com/">ARK36</a>, said,



&#8220;The first reason to expect higher BTC prices&nbsp;is that the current price trend is driven mostly by spot purchases. When Bitcoin was last at $50K levels last time, much of the market activity was leverage trades which made for a much less resilient market structure,&#8221; Lykke said in a note. &#8220;Earlier this year, investor sentiment was insatiable amid expectations of parabolic rallies, but markets rarely move in one direction, even in a bull market. The blockchain fundamentals and a large number of deleverage positions make us very bullish on the development of the uptrend once the $50K barrier has been breached.&#8221;



<figure class="wp-block-image size-full is-resized"><img decoding="async" loading="lazy" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/A8E3EAE0-52D7-4C2A-9493-CAF32B5D8C33.jpeg" alt="" class="wp-image-6905" width="811" height="482" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/A8E3EAE0-52D7-4C2A-9493-CAF32B5D8C33.jpeg?w=633 633w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/A8E3EAE0-52D7-4C2A-9493-CAF32B5D8C33.jpeg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/A8E3EAE0-52D7-4C2A-9493-CAF32B5D8C33.jpeg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/A8E3EAE0-52D7-4C2A-9493-CAF32B5D8C33.jpeg?w=439 439w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/A8E3EAE0-52D7-4C2A-9493-CAF32B5D8C33.jpeg?w=369 369w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/A8E3EAE0-52D7-4C2A-9493-CAF32B5D8C33.jpeg?w=80 80w" sizes="(max-width: 811px) 100vw, 811px" /><figcaption>Source: Senior commodity strategist for Bloomberg Intelligence Mike McGlone</figcaption></figure>



<h3>Currencies</h3>



<ul><li>The US dollar fell -0.55%, according to the Bloomberg Dollar Spot Index.</li></ul>



<h3>Equities</h3>



<ul><li>The Dow was up 0.61% to 35,355.</li><li>S&amp;P 500 advanced 0.85% to 4,479.</li><li>Nasdaq was up 1.55% to 14,942.</li></ul>



<h3>Commodities</h3>



<ul id="block-d64d70c9-7052-4f1a-8167-3d370fe08354"><li>Brent crude fell to $68.58 per barrel, up 5.25%.</li><li>Gold was up 1.25% to $1,805.20.</li></ul>



<h3>Fixed Income</h3>



<ul><li>US 10-year treasury yields 1.255% as of 4:00 pm ET.</li></ul>



<h3>We are looking out for</h3>



<ul><li>The now-virtual Jackson Hole Economic Policy Symposium from will begin on Thursday </li><li>US personal income and spending data will be released on Friday</li></ul>



<h3>In other news&#8230;</h3>



Paypal Holdings expanded its crypto-related services into the United Kingdom, the company announced on Monday. This permits users to buy, sell and keep their crypto assets in their Paypal accounts.



That&#8217;s it for today&#8217;s markets wrap. I&#8217;ll see you back here tomorrow.



Want more investor-focused content on digital assets?&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Join us</a>&nbsp;September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Buy it now</a>.

Bitcoin Surges Above $50K, Cardano Rises, US Dollar Slips: Markets Wrap

<div id="highlights-block_6102e2ddafe8e" class="highlights">
 <ul>
 <li>PayPal’s “super app,” which will feature additional crypto capabilities, ramping up in coming months, CEO Dan Schulman said</li>
 <li>Company looking to hire a global crypto and digital currency operations manager, other roles as part of expansion</li>
 </ul>
 
</div>



PayPal is set to expand its crypto capabilities and is mulling how it can help shape a new financial system, which the firm’s CEO said includes central bank digital currencies (CBDCs) and smart contracts.



Dan Schulman, president and CEO of the payment systems giant, revealed during PayPal’s earnings call on Wednesday that it is ramping up its new consumer wallet “super app” in the US over the next few months. In addition to features such as high-yield savings and early access to direct deposit funds, the app will offer additional crypto capabilities, he said.



PayPal is currently working on transfers to third-party wallets and creating a seamless process for taxes and tax reporting, Schulman added. The company is looking at how it can integrate that into trading and buying crypto on its platform.



Schulman also noted that the company hopes to launch crypto trading in the UK next month.&nbsp;



Michael Del Grosso, analyst at Compass Point Research, said in a research note he believes the company’s product enhancement and new services, such as PayPal’s crypto capabilities, have enhanced its consumer and merchant presence.&nbsp;



“We expect continued traction from several of its new initiatives and product releases over the last 12 months, and some of which are forthcoming,” he wrote.



PayPal <a href="https://newsroom.paypal-corp.com/2020-10-21-PayPal-Launches-New-Service-Enabling-Users-to-Buy-Hold-and-Sell-Cryptocurrency" target="_blank" rel="noreferrer noopener">first revealed in October</a> its new service enabling customers to buy, hold and sell cryptocurrency directly from their account. It <a href="https://newsroom.paypal-corp.com/2021-07-15-Increased-Purchase-Limits-for-Crypto-on-PayPal" target="_blank" rel="noreferrer noopener">announced earlier this month</a> that it raised the purchase limits of cryptocurrency for eligible customers in the US to $100,000 per week with no annual purchase limit.



“All of that is interesting, but it isn&#8217;t the main course in terms of what we are trying to do with our blockchain and digital currency business unit,” the CEO said. “We are clearly thinking about what the next generation of the financial system looks like, how we can help shape that.”



PayPal is working with regulatory agencies and central banks across the world, as Schulman said the number of countries looking into <a href="https://cms.blockworks.co/us-cbdc-prototype-ready-soon-but-will-anyone-use-it/" target="_blank" rel="noreferrer noopener">CBDCs</a> has increased from about 40 to 100 over the last year or so. Governments are showing increased interest in creating a more efficient system using new technology to bring more people into the financial system, he added.



“How can we use smart contracts more efficiently?” Schulman said. “How can we digitize assets and open those up to consumers that may not have had access to that before? There are some interesting DeFi applications as well, and so we are working really hard.”



A PayPal spokesperson declined to comment further on specific crypto capabilities and<a href="https://cms.blockworks.co/podcast-how-to-get-started-in-defi/" target="_blank" rel="noreferrer noopener"> DeFi</a> applications it is working on.



PayPal is looking to continue building its team to “shape the thought process around this,” Schulman added.



The firm is seeking a global crypto and digital currency operations manager to be based in New York, according to a July 12 job posting. The manager would work with PayPal’s Treasury team, as well as its Blockchain, Crypto, and Digital Currency unit as PayPal moves into cryptographically secured digital currencies and expands its offerings and roadmap, the listing states.



Separate listings show that PayPal is also looking to hire crypto risk managers and investigators; legal directors to work on crypto and regulatory business initiatives; and senior managers of cryptocurrency product; and cryptocurrency technology strategy enablement program managers, among other roles.



The talent search comes after rival Visa recently announced <a href="https://cms.blockworks.co/visa-bolsters-crypto-division-with-new-hires-promotions/" target="_blank" rel="noreferrer noopener">a swath of promotions and additions</a> to help advance the adoption and use of bitcoin, stablecoins, NFTs, DeFi and public blockchain networks. 



Want more investor-focused content on digital assets? <a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Join us</a> September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket. <a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Buy it now</a>.

PayPal CEO: Smart Contracts, DeFi Apps Part of Company’s Crypto Plans

Jacquelyn Melinek

<div id="highlights-block_60d20c186c948" class="highlights">
 <ul>
 <li>PayPal previously announced that it was launching international crypto offerings and that the company was “significantly investing” in its new crypto, blockchain and digital currencies business unit, CEO said </li>
 <li>Visa has also spent a fair amount of time investing in the digital asset space in recent months and years, and has said it would be working with Anchorage, a digital assets bank, as a settlement partner as well as Crypto.com as a payment gateway, Blockworks previously reported </li>
 </ul>
 
</div>



Blockchain Capital, a cryptocurrency venture capital firm, closed a $300 million fundraising round with investors including PayPal and Visa, the company announced on June 22.&nbsp;



The company’s fifth fundraising, also known as “Fund V,” was oversubscribed at its $300 million hard cap with investors from around the world, the company said. Some of the investors from Fund V, including PayPal and Visa, will participate in Blockchain Capital’s strategic partnership program.&nbsp;



Since its inception eight years ago, <a href="https://cms.blockworks.co/morgan-stanley-blockchain-capital-lead-48m-funding-for-securitize/" target="_blank" rel="noreferrer noopener">Blockchain Capital</a> has invested in more than 110 companies, protocols and crypto assets across the ecosystem. The portfolio includes such industry leaders as Coinbase, Kraken, Anchorage and OpenSea, as well as DeFi leaders Aave, Nexus Mutual and UMA. The company invests in both equity and crypto assets and is a multi-stage investor. 



The company was not available for additional immediate comments requested by Blockworks on June 22.&nbsp;



With the new funding, the company will continue to partner with industry professionals to help them grow their businesses and protocols, while focusing on investments in blockchain infrastructure, DeFi, NFTs and emerging applications of blockchain technology, it said.&nbsp;



&#8220;PayPal is committed to fostering an ecosystem of companies making digital currencies more accessible, useful and secure,&#8221; said Jose Fernandez da Ponte, vice president and general manager of blockchain, crypto and digital currencies at PayPal. &#8220;Investing in Blockchain Capital&#8217;s new fund allows us to engage with the entrepreneurs driving the future of the decentralized economy and the new wave of financial services.&#8221;



PayPal previously announced that it was launching international crypto offerings and that the company was “significantly investing” in its new crypto, blockchain and digital currencies business unit, CEO Dan Schulman said during the company’s fourth quarter earnings in February, Blockworks <a href="https://cms.blockworks.co/paypal-has-a-new-business-division-dedicated-to-crypto/" target="_blank" rel="noreferrer noopener">reported</a>. 



Separately, earlier this month <a href="https://cms.blockworks.co/paypal-alums-launch-decentralized-payment-network-that-connects-fiat-and-digital-currencies/" target="_blank" rel="noreferrer noopener">two former PayPal leaders</a> launched the first international payment network, Six Clovers, that uses regulated stablecoins to power global transfers between banks, merchants and payment providers. 



Similarly, Visa has also spent a fair amount of time investing in the digital asset space in recent months and years, and has said it would be working with <a href="https://www.anchorage.com/" target="_blank" rel="noreferrer noopener">Anchorage</a>, a digital assets bank, as a settlement partner as well as Crypto.com as a payment gateway, Blockworks previously <a href="https://cms.blockworks.co/visa-bets-big-on-digital-assets-integration-with-usdc-ethereum-support/" target="_blank" rel="noreferrer noopener">reported</a>. 



&#8220;We&#8217;re focused on enhancing all forms of money movement, whether on the Visa network, or beyond,&#8221; Vasant Prabhu, chief financial officer at Visa, Inc., said in a statement. &#8220;Through our relationship with Blockchain Capital, we are deepening our efforts to shape and support the role that digital currencies play in the future.&#8221;

PayPal, Visa Join $300M Round for Blockchain Capital

<div id="highlights-block_60c9248aaf5e4" class="highlights">
 <ul>
 <li>New firm Six Clovers seeks to enable organizations to instantly move and transact digital currencies.</li>
 <li>More companies to use blockchain technology for more than just buying and selling digital assets, CEO says.</li>
 </ul>
 
</div>



Two former PayPal leaders have launched the first international payment network that uses regulated stablecoins to power global transfers between banks, merchants and payment providers.



Six Clovers, founded by Jim Nguyen and Nas Kavian, connects fiat and digital currencies built on the Algorand blockchain. It allows organizations to integrate and enable instant payments using digital currencies across borders.



The new company looks to offer an alternative to the widely used SWIFT protocol, which the firm said relies on transfers between several intermediaries that can take a few days.&nbsp;



“A lot of the infrastructure that we are using today was built during the 1970s and ’80s&#8230;and for a lot of folks who are maybe born in that generation, it’s OK,” Nguyen, the firm’s CEO, told Blockworks.&nbsp;“But the internet native folks are now in the workforce and they’re like, I get my email in real-time, I can refresh my webpage in real-time, why does my money have to take a couple days to get there?”



Six Clovers’ RAPID decentralized network uses stablecoins such as USDC to represent fiat on-chain, and enables immediate transfers between a sender and receiver. The network can support about 46,000 transactions per second and can confirm a transaction’s completion in a few seconds.



Six Clovers is backed by lead investor <a href="https://borderlesscapital.io" target="_blank" rel="noreferrer noopener">Borderless Capital</a>, as well as <a href="https://bcw.group" target="_blank" rel="noreferrer noopener">BCW Group</a>, a fintech-focused strategy consulting firm, and Argentina bank <a href="https://www.gruposupervielle.com/English/Our-Company/Business-Overview/default.aspx" target="_blank" rel="noreferrer noopener">Grupo Supervielle</a>.



“Fueling cross-border transactions with regulated stablecoins to represent fiat on-chain has never been done before,” David Garcia, CEO and Managing Partner at Borderless Capital, said in a statement, “and is going to unleash a wave of mass blockchain adoption across banks, merchants and payment providers as they see the need to embrace the digital future.”&nbsp;



<h3>Modernizing payments on the chain</h3>



Nguyen and Kavian in 2009 co-founded RubyCoins, which PayPal, an online payment system used as an alternative to checks and money orders, later acquired in 2011.&nbsp;



Nguyen worked for about five years at PayPal as head of digital business development before joining crypto exchange OKcoin. Kavian was a software architect and a lead product manager during his seven-year stint with the company before spending a year as head of engineering at a cannabis retail platform called Greenbits, according to his <a href="https://www.linkedin.com/in/nkavian/" target="_blank" rel="noreferrer noopener">LinkedIn profile</a>. He is Six Clovers’ chief technology officer.



The two reunited to solve the problem of slow payments, Nguyen said. The recent confluence of blockchain technology and stablecoins, as well as the increasing awareness of these innovations, offered a chance to build a new payment system, he added.



Six Clovers’ key differentiation from other payment stacks like PayPal, <a href="https://cms.blockworks.co/visa-bets-big-on-digital-assets-integration-with-usdc-ethereum-support/" target="_blank" rel="noreferrer noopener">Visa</a> and <a href="https://cms.blockworks.co/mastercard-to-bring-select-cryptocurrencies-to-its-network-later-this-year/" target="_blank" rel="noreferrer noopener">Mastercard</a> is that it exists on a blockchain. While people can send cryptocurrencies, such as bitcoin or ether, the new firm allows for capabilities such as refunds, which Nguyen said was not available on the blockchain.



“Sending is not enough,” the co-founder said. For a merchant or an enterprise to use it, you have to have send, receive, web hooks and all these other capabilities that’s required in a payment stack. &#8230;We really tore down and really rebuilt payments from scratch, and really adapted for the blockchain.”



The use of stablecoins solves the problem of sending a cryptocurrency with a fluctuating value, Nguyen added.



While the early days of cryptocurrency have been about buying and selling digital assets, the CEO said he expects the next phase in the space will nbe using blockchain technology itself to improve existing businesses and build new ones.



“We’re probably one of the first to really use blockchain as a pure technology and not [just for] trading tokens,” he said. “I think that you’re going to see a lot more enterprises and companies using blockchain as a technology moving forward.”