NY Court Orders Longfin to Pay $223M to Investors After Blockchain Pivot Turns Securities Fraud

Longfin, a now-defunct crypto firm that raised $27 million in 2017, has been ordered by a Manhattan federal judge to repay $223 million to its investors along with interest in the alleged security fraud case. Longfin acquired an undervalued company back in 2017, after which its share prices surged by 1000%.

The judgment came on July 29, where the federal judge concluded that Longfin, along with its chief executive Venkata Meenaalli, CTO Vivek Ratakonda, and the director of two related companies, Suresh Tammineedi collectively owned a nine-figure sum. The case’s ruling has granted a default judgment, as requested by lead plaintiff Mohammad Malik in January. The judge in his decision noted that Malik:

“offered sufficient evidentiary support through declarations and exhibits submitted in support of his claim for damages, and no evidentiary hearing is required.”

A Brief History of the Case

Longfin launched an IPO as a Regulation A+ offering back in September 2017, which allowed the firm to raise funds from both accredited and non-accredited investors. It also obtained waivers from several registration requirements of the Securities Exchange Act of 1934. It went on to raise $27 million by December and called its IPO a successful event.

At the time, the firm also claimed that it had become the first publicly listed fintech firm under Reg A+ on Nasdaq. Soon after a successful IPO, Longfin acquired Ziddu.com, a cloud storage solution that claimed it had incorporated blockchain technology. The price of Longfin’s share surged by 1000% from $5 a share to $140 in early 2018. However, shareholders accused the company of issuing false and misleading statements, which led to the 1000% surge.

The firm is also accused of selling its shares after the surge, which prompted the Security and Exchange Commission (SEC) to look into the firm’s working and investigate any wrongdoing. The SEC started their investigation in April 2018, and soon after, the price of the shares crashed.

In September 2019, the SEC received a judgment in its favor against Longfin, where a New York federal court found that the crypto firm falsified documents and data to receive Regulation A+ offering.

The court also found that Longfin lied about primarily operating from the US and lied about qualifying shares and shareholders sold in the offering. The court found that $66 million in revenue generated by the firm came from “fictitious revenue and sham commodities transaction” equivalent to 90% of the company’s revenue.

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Author: Rebecca Asseh

Decentralized Derivatives Exchange Injective Raises $2.6M In Fresh Funding for Upcoming Mainnet

Injective Protocol, a front-running resistant layer-2 decentralized exchange protocol has raised $2.6 million in seed funding round led by Pantera Capital and many other prominent firms such as QCP’s investment arm QCP Soteria, Axia8 Ventures, and OK’s strategic investment partner K42.

The Injective Protocol was also a part of the Binance incubation program of 2018. The protocol itself aims to solve the scalability and liquidity issues faced by exchanges. Solving these issues would not only offer working capital but also liquidity solutions for decentralized exchanges.

Commenting on their new partners, and what led to lead the funding round, was Paul Veradittakit, Partner at Pantera Capital stating:

“Injective Protocol scalably brings advanced derivatives capabilities to Defi while being uncompromisingly decentralized.

We see Injective as a strong contender to expand Defi beyond just Ethereum power users and to serve as an integral layer ushering the new dawn of decentralized derivatives.”

Injective protocol promises to boost the decentralized exchange market by improving liquidity and also promise to help in building different products to cater to the needs of the consumers.

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Author: Hank Klinger

Robinhood Raises Another $320M in Series F; Trading Apps Valuation Soars to $8.6 Billion

The crypto-friendly mobile trading app, Robinhood, has raised another $320 million in its new funding round. This takes the total amount of funds raised in its Series F funding round to $600 million, and its overall valuation to a whopping $8.6 billion. The investment round was led by the likes of TSG Consumer Partners and IVP.

The Series F funding round was announced by the company in May and raised around $280 million at that time, where the funding round was led by Sequoia Capital, along with participation from firms such as NEA, Ribbit Capital, 9Yards Capital, and Unusual Ventures.

The Robinhood app has been riding high on the success of this pandemic period. With the app registering whopping traffic, given that it allows users to trade and buy cryptocurrency, making it an excellent way for beginners to venture into the crypto space. The firm has reported the creation of more than 3 million funded accounts by May, suggesting the popularity of the application.

The Robinhood App may be seeing a great deal of success in 2020, but it also has its fair share of controversies, especially multiple outages and shutting off the app at peak hours. It also reportedly led to the suicide of one 20-year-old user Alexander Kearns. He found his Robinhood wallet balance at -$730,000 while trading options after one of the many shutdowns of the application.

The co-CEOs of the firm Vlad Tenev & Baiju Bhatt soon wrote a blog post expressing their condolences for the loss of Keams and also promised to upgrade the interface and added layer of authorization required to trade options. The firm also donated $250,000 towards suicide prevention. An excerpt from the blog post read:

“It is not lost upon us that our company and our service have become synonymous with retail investing in America and that this has led to millions of new investors making their first investments through Robinhood. We recognize this profound responsibility, and we don’t take it lightly. We aspire to innovate, lead, and go beyond the status quo.”

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Author: Hank Klinger

Decentralized Indexing Protocol, The Graph, Raises $5M In A SAFT From Coinbase and DCG

Ethereum-based data startup, The Graph, has revealed that it has raised $5 million after its token sale.

The San Francisco firm announced on Tuesday that the new token sale, utilizing the Simple Agreement for Future Tokens (SAFT) model, for various accredited investors.

Among the participants were highly reputable firms such as Coinbase Ventures, ParaFi Capital, Framework Venture, as well as Digital Currency Group. Previously, the company had acquired $2.5 million during the seed round, which was led by Multicoin Capital.

The Graph has developed an indexing platform that will help organize blockchain data for easy accessibility. Individuals can utilize The Graph’s open-source platform for searching specific Ethereum data just as is the case with Google search.

According to Yaniv Tal, The Graph CEO, there are thousands of developers who are already using the firm’s tools, which includes the team that came up with decentralized exchange (DEX) Uniswap as well as token-fueled Aragon project.

Hayden Adams, Uniswap’s co-founder, confirmed that they use The Graph’s tools for Uniswap.info – the company’s analytics site.

Speaking to the press, Framework Ventures’ Michael Anderson, one of the lead investors, stated that his firm was pleased to support Yaniv and his team. According to Anderson, his firm would help The Graph to grow further once it launches. Anderson also stated that The Graph’s reputation was at par with that of Chainlink as well as Ethereum.

At the moment, The Graph is a hosted service but, plans are underway to ensure it moves to a decentralized network before the end of the year.

The Graph was founded in 2018 and currently services thousands of applications. The firm claims that it processed approximately 50 million queries every day, and in May, it processed 750 million queries, which represented an increase of 45% compared with April.

SAFTs are designed to allow firms to sell the rights to future tokens that are only available once the network is launched. The format was developed to ensure that a startup isn’t operating an unregistered securities sale.

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Author: Joseph Kibe

AMD And ConsenSys-Backed, W3BCLOUD, Raises $20M to Enhance Decentralized Cloud Computing

  • Ethereum-related ConsenSys and AMD announced a cloud computing project, W3BCLOUD, which has so far raised over $20 million in its first seed funding round.

ConsenSys and chip manufacturer, AMD, announced a $20.5 million seed round funding raised through convertible notes for its W3BCLOUD project, a data center venture. The project aims to offer an institutional-grade and enterprise-friendly decentralized cloud computing services. The funding will be used to increase the capacity of GPUs used by W3BCLOUD from the current 6,000 cards to well over 20,000.

The project will be built on the Ethereum network with iterations on other blockchains are also in the project’s plans. The co-founder of W3BCLOUD, Wael Aburida, states the company will spend over 90% of the seed funding amount in a bid to increase the “horsepower” of their computers to provide stable and high-performance cloud services to their customers.

The seed funding round aims at a hard cap of $30 million after a successful round of financing by ConsenSys, AMD, and a group of “unnamed” family offices in the United Arab Emirates.

Why the Extra GPU capacity?

Speaking on the partnership between AMD and ConsenSys, the co-founder and CEO of W3BCLOUD, Sami Issa, said the former would provide the hardware needed (GPUs) to “optimize the decentralized computing platform” while the latter offers the blockchain skillset to develop software solutions starting with the Ethereum blockchain.

The CEO pointed out the scalability issues and challenges on Ethereum to process vast amounts of data on the cloud computing platform. According to Sami, W3BCLOUD can be integrated and built on any blockchain, but Ethereum is the choice due to its market size.

The company is yet to release a statement on what the extra GPUs will be used for. Still, speculations remain high on possible mining businesses or increasing storage space for their customers. Currently, the data centers are focusing on wider decentralized computing services to branch out from the only blockchain. Issa hinted at the possible creation of new uses for the data centers, including decentralized AI and decentralized virtual reality.

He further said,

“We have access to the best computers and the best blockchain minds, we are going to build the computer infrastructure needed for the attractive use cases for the community.”

Preventing 51% attacks

Not only will W3BCLOUD build a decentralized cloud computing platform but also assist proof of work blockchains in securing their networks. The company will act as a shield to prevent hackers from carrying out a 51% attack in the early stages of the blockchain. This prevents hackers from double spending and rewriting the confirmed blocks.

Decentralized cloud computing is gaining steam in the crypto field with a number of companies, including RippleNET and Google Cloud, joining the fun.

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Author: Lujan Odera

Crypto Options Exchange Sparrow Raises $3.5M Led by BitMex’s Parent Firm HDR Global

  • Sparrow, a crypto options trading platform based out of Singapore, has raised $3.5 million in a Series A funding round.
  • The funding round, led by the parent company of Bitmex exchange HDR, also saw participation from the likes of Signum Capital, Du Capital, and FinLab EOS VC.

The options exchange offers Bitcoin and Ethereum options trading on its platform, which is executed via smart contracts. The firm also claimed that current liquidity would set them apart from similar other platforms saying their platform has more liquidity than over-the-counter trading Options.

Kenneth Yeo talked about how Sparrow as a platform is well structured to facilitate options trading in the decentralized space and said:

“Around 90% of our orders are filled within minutes, via a global liquidity book and an extensive network of liquidity providers and market makers.

Our options are settled on Ethereum smart contracts on the NIDUS Chain, enabling automated and transparent settlement of options contracts.

Competing platforms are proprietary and closed systems that rely on trust rather than transparency.”

Sparrow exchange was launched back in June 2019, and CEO Yeo claims that since its launch, the trading platform has seen its volumes grow by three folds peaking at $150 million.

With the crypto derivatives market flourishing and registering all-time high trading volumes, sparrows Series A fundraiser could prove to be a big boon and provide them with a push start in the already thriving market. At present, both the Options and Futures crypto derivatives market are seeing higher volumes than the spot markets.

Crypto Derivatives Market Thriving

The crypto derivatives market has seen a significant surge in volumes for both futures and options market. While the options market is comparatively just a fraction of the futures market, it still registered an amount of $3.1 billion last month. In comparison, the futures market clocked a whopping $558 billion in the same period.

The options market’s volume might look like a small fraction when compared to futures and spot markets that seem to be growing at a rapid pace. The ratio between spot trading volume and options trading volume has surged from 0.009 to 0.029.

Sparrow is planning to utilize the recently raised capital on expanding its service and workforce. The options trading platform has also applied for a payment license in Singapore.

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Author: James W

Decentralized Blockchain Platform Celo Wraps Up $10M cGLD Auction on CoinList

cLabs, a Silicon Valley-based blockchain startup, has revealed that it has raised approximately $10 million through auctioning off the Celo Gold (cGLD) tokens which were availed to investors within the CoinList platform.

According to a press statement shared with Bitcoin Exchange Guide, about 509 investors drawn from different parts of the world were involved in the auction process, and on average paying $1 for every Celo Gold (cGLD) token. The press release also indicated that the majority of the investors are from Germany as well as the United Kingdom. The startup also confirmed that on average, a buyer spent about $519 for the cGLD token and in most instances earned about 50 tokens in bonus for referrals. The auction came to an end on Tuesday morning after running for approximately 12 hours.

The current sale of the cGLD tokens will help the startup to add to its $30 million raised in venture capital funding by companies such as Polychain as well as Andreessen Horowitz (a16z). Apart from being a major funder of the project, Polychain is currently one of the 77 entities which are running Celo validator nodes.

Whereas it is not clear when the launch date will be, the CoinList investors are expecting to get their tokens before the end of the year.

[Also Read: Celo Adds 20+ New Members to the Alliance for Prosperity]

According to Andy Bromberg, CoinList co-founder, the cGLD token sale was the second time the platform has conducted a successful token sale this year and follows the successful sale of Solana tokens which raised 1.76 million. Bromberg also stated that CoinList buyers will be able to get the cGLD tokens direct into their CoinList wallets after the Celo mainnet finally goes live. Additionally, the investors can also opt to transfer their tokens to external wallets that they own to Custodians like Anchorage and Coinbase.

CoinList stated that it is focused on assisting prospective crypto projects to succeed and it was a pleasure to partner with the Celo project. Currently, Celo enjoys the support of more than 700 backers.

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Author: Joseph Kibe

BTC Rewards App Lolli Raises $3M From Ashton Kutcher, Michelle Phan, and Bain Capital

Lolli, an e-commerce app that rewards shoppers with Bitcoin, has successfully raised $3 million in its seed funding.

The latest funding round was participated by Ashton Kutcher through his firm Sound Ventures as well as Michelle Phan from YouTube. Now, Lolli has so far managed to raise $5.4 million in capital.

The round was also participated by Pathfinder which is the early-stage investment outfit, Bain Capital Ventures, Digital Currency Group which owns CoinDesk as well as Craft Ventures.

According to Alex Adelman, Lolli’s CEO, explained that there are various incredible strategic partners which will play a pivotal role in enhancing the mass adoption of Bitcoin and Lolli going forward.

Starting this week, Phan’s fans can utilize Lolli in earning Bitcoin rewards after shopping from her Em Cosmetics website. Adelman explained that the current funding is set to be utilized in introducing Lolli’s mobile app during the upcoming summer as well as expand the firm globally this year.

Since Lolli was started in 2018, the e-commerce sector has changed tremendously. The majority of people in the world are shopping online as well as managing their own funds via apps. For instance, Shopify reported that its revenues have increased by 47% in the first quarter of 2020.

In addition, Square, a fintech startup that provides Bitcoin, is now taking part in mainstream programs such as the Paycheck Protection Program run by the US government. This is evidence that it is becoming easier as days go by for individuals to earn as well as use various forms of currencies from the comfort of their home.

Adelman praised Square’s latest patent to enable fiat to crypto conversion as a ‘game-changer’ that will be beneficial to the retail sector. He explained:

“It’s arguably the most important patent in the payments space that will affect cryptocurrency over the next 10 years. It’s an air-swap where someone can pay with whatever currency they want and also the merchant can accept whatever currency they want.”

Lolli will benefit immensely from Square’s patent as the startup teams up with merchants and retailers that emanate from homepages apart from Amazon. You can learn more about Lolli BTC Rewards App here.

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Author: Joseph Kibe

Bitcoin Cash Dev Proposes ‘BCH Node’ To Avoid An Unwanted Chain Split, Roger Ver On Board

The Bitcoin Cash (BCH) client upgrade scheduled for May, 2020 has raised heated arguments on some of its aspects. However, one BTC developer on Github by the name ‘ftrader’ is creating an alternative for the ‘disputed’ Bitcoin ABC v0.21.0 client.

According to ftrader’s post on reddit, the proposed version is unfit for upholding blockchain integrity. The developer defended this position by noting a chain split possibility in the near future due to lack of an activation method and consensus.

Bitcoin Cash Node (BCH Node)

In a bid to prevent the underlying risks, a group of BCH developers have come up with ‘BCH Node’ as a substitute to Bitcoin ABC v0.21.0. Basically, the former is a minimally altered version of the latter. The BCH Node as a modified client version will exclude a diversion code, signal and activation prompts for Coinbase rewards.

Current Bitcoin Cash ABC users will receive the proposed alternative as a ‘drop in’ replacing their old ecosystem. Notably, Roger Ver supports this version; the strong BCH advocate commented under ftrader’s post; “Looks like we now have the right software to run for the May 15th upgrade”

In addition, significant players in past BTC forks are set to contribute in the development of BCH Node. Some of the participating developers have featured in Bitcoin Cash ABC, Bitcoin Unlimited and Bitcoin XT forks.

A Proposed Developer Tax on Bitcoin Cash

Bitcoin Cash in its proposal has suggested a developer tax in the new client upgrade; this is meant to contribute towards growing the platform’s infrastructure. The proposal was however met with a resistance forcing BCH to review the tax from an initial 12.5% to 5%.

BCH came out to clear the air highlighting that they need to keep innovating within the Bitcoin Cash platform or face the risk of going down. It is still unclear what will be of the new BCH client version but some skeptics are of the opinion that this is an avenue to mint more coins.

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Author: Edwin Munyui

Crypto Lender BlockFi Secures $30M Series B To Bring In More Institutional Customers

BlockFi, a crypto lending startup based in New Jersey has raised $30 million in the just concluded Series B funding which was led by Peter Thiel’s startup, Valar Ventures.

As reported by CoinDesk, BlockFi stated on Thursday the fresh funding is meant to allow the startup to expand in its products portfolio as well as in its presence in the world. Zac Prince the firm’s CEO stated,

“Our Series B quickly follows our Series A six months earlier, which is a testament to the rapid growth we’ve been experiencing these past few months across revenue and user acquisition. Our main focus this year is expanding our products to the crypto-curious. We are determined to build out financial products that make crypto easy to use by the mainstream audience. We’re working towards a future where mobile banking is available to consumers on a global scale, leveraging crypto as payment rails.”

The Series B round was led by Valar Ventures, a brainchild of Peter Thiel and also included the participation of notable return investors such as Morgan Creek Digital, Avon Ventures, CMT Digital, PJC, Winklevoss Capital and Akuna Capital. New investors included numerous firms such as Island Ventures, Arrington XRP Capital, Kenetic Capital, HashKey Capital among others.

The investment by HashKey Capital is important to BlockFi as it will enable the firm to easily debut in Singapore in the near future, Prince revealed. According to Prince, although the firm has been actively serving its clients in Singapore and its environs, this would mark its inaugural physical presence in the region.

Prince also explained that BlockFi is expecting to draw lots of institutional clients in the Asia-Pacific areas as there are many mining firms, crypto exchanges, asset managers as well as market makers in the region. Once the firm translates its services and products into local dialects, it is hopeful of drawing in high retail clients from the region.

The firm has already set its goals for the first two quarters of the year. It plans to create a mobile app as well as the capability to send fiat wire transfers in the first quarter. The firm also plans to begin providing Automated Clearing House (ACH) money transfers in the second quarter of this year.

The raised funds will also be used to increase the number of Blockfi’s team from the current 75 to 150 before the end of the year, Prince stated.

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Author: Joseph Kibe