FTX Raises $420M From 69 Investors

The biggest crypto news and ideas of the day

Oct. 21, 2021

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Today’s must-reads

Top Shelf

MEME TEAM: FTX, the Bahamas-based crypto exchange, has raised $420,690,000 in a Series B-1 funding round including 69 investors. Investors valued the exchange at $25 billion, a nearly 39% jump over the Series B sticker price from July when it raised $900 million in crypto’s largest-ever venture capital funding round. FTX says users have grown 48% in that period and trading volume rose 75%.

FINTECH PROTECTIONS: The Consumer Financial Protection Bureau (CFPB) has ordered information about payments products, plans and practices from Google, Amazon, Apple, Facebook, Square and PayPal. The CFPB has been taxed by Congress with ensuring competition is fair in payments markets, given the immense scale of this group of companies and therefore their ability to monetize data on customer spending habits.

GAZE INTO THE ORB: Worldcoin, a project that plans to scan the eyes of every living person using an Orb to register them for a type of crypto-based universal basic income has raised $25 million from investors including Andreessen Horowitz (a16z), Coinbase Ventures and Digital Currency Group (the parent company of CoinDesk). The 70-person company, based in Berlin, predicts over a billion people will have gazed into the Orb by 2023.

SPORTING! Candy Digital, a non-fungible token (NFT) startup majority-owned by Fanatics, has completed a $100 million Series A financing round co-led by Insight Partners and SoftBank Vision Fund 2 at a $1.5 billion valuation. Candy Digital is building the official NFT ecosystem for Major League Baseball (MLB) and other sports leagues. Separately, The Associated Press (AP), the 175-year-old news agency, will provide economic, sports and elections data to Chainlink.

OTHER FINANCING: Copper, a provider of crypto services for institutions, is in talks over a $500 million funding round valuing the firm at $2.5 billion. NFT marketplace tool Mojito has received $20 million in funding from Sotheby’s and Future Perfect Ventures. Tesla took a $51 million impairment charge to its bitcoin holdings last quarter. Finally, a multi-billion dollar rehabilitation plan for users affected by the collapse of the first bitcoin exchange Mt. Gox has been approved.

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What will 2022 bring? Crypto 2022 is CoinDesk’s ambitious effort to scope out what’s next. This week it's Policy Week, a week devoted to exploring the complex ways governments are interacting with the cryptocurrency ecosystem, and how policy decisions or lack thereof will affect the year ahead. Read more here.

"There’s a huge generation gap and it’s working itself out in the policy development for crypto."

–Former U.S. Commoditiy Futures Trading Commission Chairman Chris Giancarlo, on CoinDesk TV’s “First Mover.”

What others are writing...

Off-Chain Signals

Bitcoin dev has fix for Lightning’s existential problem — offline payments (Protos)

Crypto miners struggle to cut carbon emissions (WSJ)

Two SIM swappers phished a phone company so they could steal $16K in crypto (The Verge)

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Putting the news in perspective

The Takeaway

NFT Artist Brian Frye Wants You to Steal This Article

Brian Frye, a conceptual artist, film maker and law professor, encourages people to plagiarize everything he’s ever created or said.

“I'm the legal academy's leading plagiarism advocate. I'm also the legal academy's only plagiarism advocate, which makes it very easy to be number one,” the bespectacled Frye said in a video call yesterday. Well, professor, I’m stealing that joke.

This pro-plagiarism stance is part of Frye’s continuing campaign against copyright, the legal instantiation of the idea that ideas can and should be owned. Over the past decade and a half, Frye has written countless legal reviews and op-eds discussing how copyright is antiquated in a world where the internet eliminates the costs associated with reproduction and distribution.

“Ideas are non-rival,” he told CoinDesk. “You don't need to value them because there's no scarcity, so they should be valueless.”

This contrarian opinion has brought him to the world of non-fungible tokens (NFT), the blockchain-based technology often credited with bringing “scarcity” to digital goods. It’s an idea for which lots of people are willing to pay big bucks.

A representative example: Ether Rocks is a series of virtual pet rocks that “live” on the Ethereum blockchain. There are 100 unique tokens – each corresponding to a near-identical cartoon JPEG – that even the creators say serve “NO PURPOSE” beyond speculation. Though the original image was a royalty-free piece of clip art, some people have spent millions of dollars on these tokens.

But, as Frye notes, what people are buying when they buy any NFT is “worthless.” By and large, NFTs do not represent ownership of the digital goods to which they supposedly correspond, do not confer copyright and may, in fact, one day be classified as securities. “So the owner of the NFT gets nothing other than the right to claim ownership of the NFT,” he wrote in August.

That’s not nothing. In fact, Frye is learning NFTs have a lot going for them. For one, there’s a sort of community-wide acceptance that people can sell even things they don’t possess. He sold an NFT of the Brooklyn Bridge for $500 – stealing the idea from an infamous scam artist.

NFTs are the “reductio ad absurdum” of contemporary art markets, meaning they reduce the “concept of ownership to its purest essence, it's the ownership of ownership,” he said, and of art to pure market functions. Art, he said, has always been more about status than anything, and the blockchain just makes this pecking order more visible and open.

Further, NFTs are a sort of blunt instrument to wield against legacy institutions. In September, Frye minted a series of NFTs tied to a paper he wrote called “SEC No-Action Letter Request,” which raised the question of whether selling shares of ownership in the paper is an illegal unregistered security.

There was the implicit promise of income, which, to his surprise, actually came through. He brought in tens of thousands of dollars worth of ETH in the sale. This proved his thesis: The project called into question standing securities law, which Frye thinks is overly-broad in covering “any investment in a common enterprise that generates profit from the efforts of others,” and lays out a possible argument the SEC could use against him.

It’s easy to call everything meaningless: Art, securities rules, copyright. As part of a series we’ve called “Gensler for a Day,” which is asking informed and influential people to give their ideal crypto policies, CoinDesk reached out to see if Frye has any concrete plans, not just concepts. It’s not too far out there: Frye did once run for public office.

What follows is a condensed version of our conversation, covering NFTs, the SEC and the merits of writing while taking a bath. You can read the interview on CoinDesk.com. And feel free to steal his ideas.

–Daniel Kuhn

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