FBI Seizes Polymarket CEO’s Electronics

Portal Ventures $75M Crypto Fund | Elizabeth Warren New Role

Marco Manoppo & Karon Pangestu
November 15, 2024

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Good Morning.

Market euphoria may have subsided, but deal flows surged this past week. Polymarket finds itself at the centre of the latest US crypto crackdown, though it’s likely to be the last under the current administration, with Trump set to take office on January 20. It seems the current US government isn’t ready to “go gentle into that good night” just yet.

In Today's Email:

What Matters: FBI Seizes Polymarket CEO’s Electronics 👀
Founders Highlight: Jeff Dorman of Arca 🔷
Deal Flow: Portal Ventures Raises $75M for Pre-Seed Crypto Fund :

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Narratives: 7 from 10 the top performing crypto in the past week are meme coins.

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WHAT MATTERS

FBI Seizes Polymarket CEO’s Electronics

Shayne Coplan (IMG: Yahoo)

State of play: The FBI reportedly seized Polymarket CEO Shayne Coplan’s phone and electronics early Wednesday as part of a Department of Justice (DOJ) investigation, according to sources cited by the New York Post.

This investigation focused on Polymarket’s alleged use by US customers, follows the platform’s $3B in trading volume ahead of the recent US presidential election, where it correctly predicted Trump’s victory.
Polymarket previously settled with the US CFTC in 2022, paying a $1.4M fine and agreeing to restrict US users.
The restriction came after the CFTC flagged Polymarket’s "event-based binary options."
Despite geo-blocking US users, the DOJ probe reportedly investigates the presence of US participants using VPNs to bypass restrictions.
Amid the FBI’s seizure, a source close to Coplan suggested the move is “political retribution” due to Polymarket’s prediction of a Trump victory.

While Coplan has not been arrested, he voiced frustration on X, urging policymakers to take a “pro-business, pro-startup” stance and accusing the administration of using political power against firms aligned with certain election outcomes.

The CFTC remains divided over election-related betting markets, and Polymarket’s case has drawn comparisons to Kalshi

Why it Matters: The raid has sparked widespread conversation about regulatory pressure on decentralized markets and raises questions about the DOJ's handling of political neutrality in digital markets.

What’s next: The DOJ probe may lead to stricter geo-fencing enforcement and user restrictions, potentially pushing platforms to adjust their offerings to align with tighter regulations.

For builders and investors: Builders in DeFi and prediction markets may need to prioritize compliance to avoid legal setbacks, focusing on platforms with proactive regulatory approaches for greater stability.

BUILDER-INVESTOR HIGHLIGHT

Jeff Dorman of Arca

Intro: Jeff Dorman is the Co-Founder and Chief Investment Officer at Arca, an asset management firm that creates and manages institutional-grade products using crypto and blockchain technology.

Arca and BlockTower Capital recently signed a Letter of Intent to pen an all-equity deal.

Previous background: Jeff brings over 17 years of trading and asset management experience from top firms like Merrill Lynch and Citadel, where he managed over $100M in proprietary capital.

He also served as COO of Harvest Exchange, a widely used FinTech platform for asset managers and investors.
Jeff is a CFA Charterholder.
He holds a Bachelor’s degree in Finance and Economics from Washington University in St. Louis.

The big idea: Jeff and Arca believe that blockchain technology will underpin all asset classes in the future, initiating a more democratized financial system.

They aim to lead this digital transformation with educational resources, investable products, and responsible innovation for the betterment of finance.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 500 crypto VC individuals 👇

INSIGHTS

Elizabeth Warren Takes Lead Role on Senate Banking Committee, Impacting Crypto Legislation

IMG: The New Yorker

State of play: Senator Elizabeth Warren, a leading critic of the crypto sector, has been appointed the top Democrat on the Senate Banking Committee, which will oversee crypto legislation.

While Republicans control the committee, Warren will have a significant platform to voice her opposition to digital assets.
She has long argued that digital assets are rife with criminal activity.
With the potential for Democrats to regain Senate control in 2026, Warren could become the committee’s chairwoman, further shaping the direction of crypto regulation in the U.S.

DEAL FLOWS

Portal Ventures Raises $75M for Pre-Seed Crypto Fund

We're excited to announce our oversubscribed $75M Portal Ventures Fund 2.
Portal exclusively leads crypto pre-seeds with the first check in. Since 2022, we've backed numerous category creators as day-one supporters. Across our two funds we’ve raised $115M. We focus on putting… x.com/i/web/status/1…
— Portal Ventures (@PortalVentures)
2:50 PM • Nov 14, 2024

Deal flows soared this week - we saw $413M+ in deals 💼

Portal Ventures has closed a $75M fund to invest in pre-seed crypto startups, marking the firm’s second fund and bringing its total capital raised to $115M.

The fund emphasizes backing startups at the earliest stages, even without a whitepaper or pitch deck, focusing on founder potential and sector growth.
The fund, oversubscribed to $90<, includes high-profile investors like a16z’s Chris Dixon and Marc Andreessen, KKR’s Henry Kravis, and Insight Partners.
Portal plans to expand its focus to tokenizable commodities like air rights and uranium, alongside its previous focus on Bitcoin-related ventures.

Deal flows in the past week:

Pulse, $1.8M Pre-Seed Round
Heurist, $2M Pre-Seed Round
mbd, $3M Pre-Seed Round
Rektguy, $1.5M Seed Round
EIDON AI, $3.5M Seed Round
BetHog, $6M Seed Round
TAC, $6.5M Seed Round
Brevis, $7.5M Seed Round
Pharos, $8M Seed Round
Cytonic, $8.3M Seed Round
0G, $40M Seed Round
Folks Finance, $3.2M Series A Round
Notabene, $14.5M Series B Round
Wyden, $16.9M Series B Round
MAP, $1M Strategic Round
StakeStone, $22M Strategic Round
0G, $250M Token Pre Sale
Multiledgers, $1M Unknown Round
Tranched, $3.4M Unknown Round
Akave, $3.45M Unknown Round
Mocaverse, $10M Unknown Round

QUICK BITES

Polymarket CEO's electronics seized in FBI raid.
Trump DeFi platform World Liberty Financial taps Chainlink.
Tether launches RWA platform to 'allow the tokenization of anything.'
Eighteen Republican AG and the DeFi Education Fund sue the US SEC.
Franklin Templeton expands tokenized money market fund to Ethereum.
US spot bitcoin ETFs top half a trillion dollars in cumulative trading volume.
Coinbase surges back into US Apple App Store top 10 hits number 1 in finance.
Pennsylvania legislators introduce a bill to invest in bitcoin and crypto ETFs as a 'hedge against inflation.'

NOTEWORTHY READS

Hitesh’s read on Crypto Chaos & Order.
Max’s read on Ethereum Needs to Dream Bigger.
eOracle’s read on Understanding Oracle Validated Services (OVS).

Real…
— hoeem (@crypthoem)
4:00 PM • Nov 13, 2024

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.