BlockFi Down Bad

Good morning. Today we've got coverage on a new crypto trading platform, BlockFi hurting in its latest funding round, and a lawsuit against the Federal Reserve. All that and more in the CT5!

Market Update (as of 8:43am ET):

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Top 5:

1. BlockFi is raising a down round at $1 billion valuation. The crypto financial services provider is finalizing a new round of funding led by Bain Capital Ventures at a valuation of $1 billion. That marks a stark difference from last year when the firm was reportedly raising funds at a valuation over $5 billion. The lower valuation is clear indication that the downturn in token prices and equities has also hit the private markets.

2. Citadel Securities, Virtu Financial building crypto trading platform. Infamous market-maker Citadel Securities has partnered with another market-making firm to build a crypto trading platform. The firms “are working closely together to create a crypto marketplace that is efficient, transparent and secure, with agreed upon standards and best practices," said the source interviewed by Blockworks. Citadel was on the receiving end of $1.15 billion in investments from Sequoia and Paradigm earlier this year and it appears this platform was a major project coming out of that funding. Launch is expected in late 2022 or early 2023.

3. Osmosis chain halted amid possible $5M exploit. Osmosis, a decentralized exchange on the Cosmos framework, was halted late last night after an exploit was identified that drained an estimated $5 million from liquidity pools. The bug allowed users to deposit funds into liquidity pools and then instantly withdraw 50% more funds than were deposited. According to an Osmosis Discord post by community member RoboMcGobo, the chain was halted 12 minutes after the exploit was identified. The decentralized exchange had $11.8 million in daily trade volume before the chain was halted.

4. Haun Ventures leads $32 million round in Ethereum protocol Euler. Katie Haun's firm led the investment round in Euler, a non-custodial protocol that allows users to lend and borrow digital assets. Euler is built on the Ethereum network and purports to mitigate lending and borrowing activity through a framework that assigns each investment a tier depending on risk. From Haun:

These kinds of innovative solutions are particularly important since lending and borrowing protocols serve as a key cornerstone of crypto markets.

5. Crypto bank Custodia sues Federal Reserve. The Wyoming based bank founded by Caitlin Long has sued the Federal Reserve saying the central bank has unlawfully delayed a decision on its application for a master account. In the suit, Custodia states, "[A master account] would allow Custodia to directly access the Federal Reserve, rather than going through an intermediary bank," and also accuses the Fed of having standardless procedures that allow them "to act in complete secrecy, whenever and however they choose." Custodia applied for a master account 19 months ago and indicated in their suit that the Fed's own paperwork says that a decisions on a master account application "ordinarily takes 5-7 business days".

Updates and other stories:
- Solana commits $100M to support South Korean crypto projects...Read More
- PayPal enables crypto transfers to external wallets, exchanges...Read More
- Crypto miner Hut 8 bucks trend by ‘hodling’ its mined bitcoin...Read More

Top Sharers of the Crypto Top 5:
1. Donna Y. - Nashville, TN
2. Jake Y. - Greenville, SC
3. Forrest H. - Evansville, IN

External Resources:
1. Cryptopedia from Gemini - if you see a word, acronym, or phrase in this newsletter that you don't understand, there's a good chance you can find an explanation here
2. Crypto Explainer+ - intro level courses on Bitcoin, Ethereum, decentralized finance, NFTs, and more
3. Crypto Jobs! - looking for a new job? Check out this page from Anthony Pompliano with hundreds, if not thousands of listings

Disclaimer: The information contained in this newsletter shall not be understood or construed as financial advice. I am not an attorney, accountant, or financial advisor, nor am I holding myself out to be, and the information provided is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation.