Uniswap: Settlement & VC Subpoenas

ETH Foundation $650M Holdings | Synthetix's Own Chain

Marco Manoppo & Karon Pangestu
September 06, 2024

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Good Morning.

The Ethereum nerds are debating about whether we should do more to ship L1-enhancing features or delegate stuff to L2s. The debate emerged as CT argues whether L2s are parasitic to Ethereum L1.

Meanwhile, the Ethereum Foundation plans to release its financial report — reportedly holding ~$650M in its main wallet.

Oooh Weee!

In Today's Email:

What Matters: Uniswap legal scrutiny 🔍️
Founders Highlight: Michael of Euler 🛠️
Deal Flow: Halo Capital’s $25M crypto fund 💰️

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Narratives: Market continues to see weakness until the $50-52k support range, we should wait and see what will happen then.

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Want to keep tracks of crypto metrics such as app store ranking, sentiment, and altcoin market cap? Check out our new tg channel.

WHAT MATTERS

Uniswap: Settlement & VC Subpoenaes

CFTC

State of play: US regulators are increasing their scrutiny of Uniswap. The CFTC has already settled charges against Uniswap, and now the NYAG is investigating the company by subpoenaing its investors.

The CFTC settled the charges against Uniswap Labs for $175,000.
CFTC fined Uniswap Labs for allowing leveraged tokens trading on its Ethereum blockchain protocol without being properly registered.
The CFTC said it will actively enforce regulations as DeFi evolves and operators must ensure compliance with the law.
The CFTC also asserted that Bitcoin and Ether are commodities.
Uniswap Labs has also previously received a Wells Notice from the SEC, alleging it acted as an unregistered securities exchange and unregistered broker-dealer.

Meanwhile, NYAG Letitia James is investigating Uniswap by subpoenaing its investors, including Andreessen Horowitz and Union Square Ventures.

The SEC has also sent letters to a16z and USV regarding Uniswap.
James has a history of pursuing legal action against crypto companies like Genesis, Gemini, DCG, CoinEx, KuCoin, and Celsius.
Uniswap Labs spokesperson said they welcome dialogue with any government agency about responsible DeFi innovation but don't want to burden anyone with unnecessary subpoenas.

Why it Matters: The NYAG's investigation, including subpoenaing Uniswap's investors, underscores the potential risks for VCs and other investors involved in the DeFi sector.

For builders and investors: If you’re building anything in DeFi or any onchain apps that might accrue value to the tokens, just make sure your incorporation is outside of the US.

BUILDER-INVESTOR HIGHLIGHT

Michael Bentley of Euler

Intro: Michael Bentley is the co-founder and CEO of Euler Labs, a team of developers and quantitative analysts building DeFi applications for the future of finance.

Previous background: Bentley studied at Newcastle University and the University of Leeds, he earned his PhD in Mathematical Biology from the University of Oxford in 2016.

Before Euler, Bentley was an analyst and did several postdoctoral research at the University of Leeds, UCL, and the University of Oxford.

The big idea: Bentley through Euler, aims to build an integrated suite of modular and permissionless protocols that, collectively create a high-performance DeFi ecosystem.

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INSIGHTS

Synthetix’s SNAXchain

It's time for a new election epoch for Synthetix Governance.
But this one comes with a twist - nominations are now live on SNAXchain, the phase 1 version of Synthetix's new app chain built on the @Optimism superchain.
— Synthetix ⚔️ (@synthetix_io)
5:58 PM • Sep 4, 2024

State of play: Synthetix is launching its app chain, SNAXchain, on Optimism's Superchain to serve as a hub for governance and decision-making.

SNAXchain will act as a neutral hub for governance and protocol decisions and more.
The network leverages Conduit for infrastructure and Wormhole for cross-chain messaging.
Optimism's Superchain is expected to boost user interoperability and growth.
Synthetix also said the partnerships and the Optimism Superchain infrastructure will enable a larger scope of utility for the chain.
This ecosystem is governed by a DAO known as the Optimism Collective.

DEAL FLOWS

Halo Capital’s $25M Crypto Fund

Left to right: Daniel Howard and Bhavin Vaid / Halo Capital

Deal flows slowed down this week, we saw $50M+ in deals 💼

Daniel Howard, son of British hedge-fund billionaire Alan Howard, and Bhavin Vaid has raised $25M for Halo Capital, a new venture capital fund focused on early-stage crypto projects.

The NY-based fund will invest broadly in the digital ecosystem, including Bitcoin and AI projects.
Halo has invested in Bima Labs and Andrena and has 20 partners advising it.
Alan Howard, a prominent crypto backer, helped establish Brevan Howard's crypto arm, which saw a 20% gain in the first half of 2024.

Deal flows in the past week:

Legend of Arcadia, $4M Seed Round
ODOS, Undisclosed $ Series A Round
Adot, Undisclosed $ Strategic Round
E-PAL, $30M Unknown Round
Halo, $25M Crypto VC fund.

QUICK BITES

Polymarket’s OI soars past $100M.
BCB Group received takeover interest.
United Texas Bank hit with cease-and-desist by Fed.
EigenLayer plans to distribute 86M tokens in season 2.
Robinhood to settle $3.9M penalty with California DOJ.
Ethereum Foundation plans to release its financial report.
UK Regulator has rejected 87% of crypto firms’ applications.
Pavel Durov says he's prepared to leave incompatible markets.
DWF Labs says it has designed a synthetic collateralized stablecoin.
Mercuryo launches Spend, a non-custodial crypto virtual Mastercard.
US prosecutors argue FTX’s Salame guilty please didn’t stop the investigation into partner.

NOTEWORTHY READS

Cheryl Douglass’ read on founder mode.
Decentralised’s read on bootstrapping networks.
Robbie Peterson’s read on rearchitecting the stablecoin stack.

the investooor
gm
— mo (@mochains)
11:37 AM • Sep 5, 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.