Crypto, where the fallen seek a new beginning - TechCrunch

Welcome back to Chain reaction.

Last week we talked about privacy in crypto and how it sometimes conflicts with regulation. This week we take a look at a larger-than-life founder who may be looking for redemption through web3.

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there is always a crypto angle

Weekly window into the thoughts of a senior crypto reporter Anita Ramaswamy:

This is a lesson we all learned during the last crypto bull run – crypto is a well-known haven for those looking to reinvent themselves. WeWork founder Adam Neumann is no exception. Neumann made waves in the tech world this week, when it was revealed that its new startup, focused on residential property communities, just received a $350 million investment from Andreessen Horowitz — the largest check the venture capital firm has ever written, though it was unclear how much of that was equity versus debt. The company, Flow, earned a $1 billion valuation before doing anything (besides buying apartments), According to to The New York Times.

Ironically, the new venture aims to try to solve the housing crisis, a plan touted by Marc Andreessen himself in blog publication announcing the deal. Andreessen is a VC who earlier this month was found to have fought tooth and nail to prevent affordable housing from being built in his affluent hometown of Atherton, California. However, initial details were scarce on exactly how Neumann’s company would actually handle the crisis, except for some vague comments about tenants not being able to benefit from having their own equity.

As if all that wasn’t enough to take in, now there’s a crypto angle.

Forbes reported this week that Neumann’s startup, called Flow, plans to launch a digital wallet for cryptocurrencies. But there appears to be little or no overlap between the wallet product and the firm’s stated focus on real estate technology, as the wallet won’t allow people to make rent payments for their Flow-owned apartments through crypto.

The company, according to Forbes, has been recruiting applicants by describing its business as a “next-generation multifamily property management system” that will include a tokenized rewards program and crypto payment capabilities. A Flow spokesperson later told Forbes that the job description was largely false and blamed the scandal on an outside specialist the company had worked with.

It’s not yet clear how big a role crypto plays in Flow’s roadmap, but the spokesperson provided Forbes with a new job description that simply focuses on residential real estate “tech,” not crypto or web3 specifically.

This isn’t Neumann’s first rodeo in the web3 Wild West. He raised $70 million, also led by a16z, about Flowcarbon in May, a startup that intended to tokenize carbon credits on the blockchain. Flowcarbon has since halted a planned token sale, citing adverse market conditions, and appears to have removed references to Neumann from its team page, although it listed him as a co-founder of the venture at the time the a16z investment was announced. Curiously, this week’s Flow announcement from a16z cites Flow as Neumann’s first post-WeWork venture, as if he wasn’t involved with Flowcarbon at all.

While many founders with substance and potential continue to be overlooked by today’s VC ecosystem, choosing a16z to make such a big bet on the infamous Neumann speaks to investors’ priorities. But if one good thing comes out of this venture, it might be a compelling television series.

the latest pod

Jacqueline and Anita took over the news reins again this week while Lucas was away, and the first item on their agenda was pretty spicy.

Do Kwon, the disgraced founder behind the collapse of stablecoin Terra, has given his first interview since going into hiding after losing billions of dollars on behalf of investors. He sat down with Coinage, an NFTV show from startup Trustless Mediato talk about his role in causing the biggest crypto crash ever.

After a recap of Do Kwon’s interview highlights, Anita and Jacqueline talk about Galaxy Digital trying to say “jk lol” after agreeing to acquire crypto custodian BitGo, and review both the bad and potentially good Crypto news .com.

Be sure to tune in for our guest interview next Tuesday, where Anita will be talking with Devin Lutan, co-founder of web3 media production studio Mad Realities.

Subscribe to Chain Reaction at An apple, Spotify or your alternative podcast platform of choice to keep up with us every week.

follow the money

Where is the startup money going in the crypto world:

  1. Decentralized communication platform Satellite IM closed a $10.5 million round led by Framework Ventures and Multicoin Capital.
  2. Rocketplace raised $9 million in seed funding to build Fidelity for crypto.
  3. Tencent veterans in the .bit secured $13 million to build cross-chain decentralized identities.
  4. Binance Labs has made a strategic investment in the web3 infrastructure protocol Ankr.
  5. Focused on Solana Jito Labs raised $10 million in Series A led by Multicoin Capital and Framework Ventures.
  6. Game studio Murasaki closed a €1.5 million seed round led by Japanese Incubate Fund.
  7. B2B web3 data analytics company Datawisp brought in $3.6 million in a seed round led by Coinfund.
  8. Animation studio Invisible Universe raised $12 million in Series A funding led by Alexis Ohanian’s Seven Seven Six to launch a new web3 IP.
  9. A fractional NFT platform Tessera (fka Fractional) raised $20M Series A led by Paradigm.
  10. A gaming DAO based on Starknet MatchboxDAO raised $7.5M led by Starkware.

This list is compiled with information from Messari as well as TechCrunch’s own reporting.

TC+ analysis

Here’s some of this week’s crypto analysis available on our TC+ subscription service from a senior reporter Jacqueline Melinek:

Polygon’s investment manager remains ‘strongly bullish on web3’

The crypto market may be in limbo between a deep bear market and a recovery, but that hasn’t stopped investors from deploying capital into the space. “In the grand scheme of things, nothing has changed in terms of Polygon’s long-term mission, bear markets or not,” Shreyansh Singh, head of investments at Polygon, told TechCrunch.

Anthony Hopkins sees NFTs as ‘art in a new format’

While celebrities and athletes are diving into the crypto realm to support tokens or companies, others are looking to NFTs as a way to engage with fans. The latest entrant is two-time Academy Award-winning actor Sir Anthony Hopkins, who has teamed up with digital collectibles company NFT Orange Comet to launch his own series, The Eternal Collection. “NFTs for me are a blank canvas to create art in a new format,” Hopkins shared with TechCrunch.

Crypto scams have declined, but hackers remain resilient in bear markets

When it comes to crime, illegal activity is still rife despite crypto volatility, according to a new report by Chainalysis. But there is a nuance to the apparent decline in illegal activity — some sub-sectors of crypto-based crime have increased in 2022, while others have decreased.

Open source software is needed to prevent future crypto hacks, Polygon CISO says

As 2022 continues to pile up expensive exploits, many in the crypto space are wondering what can be done to prevent these hacks in the future. Sure, they can stress the importance of education and protecting your own digital assets — but what else? The answer may be through projects using open source software, Mudit Gupta, chief information security officer at Polygon, told TechCrunch.

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