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Weekend Wrap: PayPal’s stablecoin game revealed

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Behind the Headlines
  • It’s official: PayPal is eyeing the stablecoin business. PayPal has confirmed that it is “exploring” a stablecoin backed by US dollars. The Block first reported on this process last May. At the time, The Block’s sources said that the payments giant was holding talks with third-party startups in the crypto space as part of this process. Now, as reported by Bloomberg, an eagle-eyed researcher has spotted code inside PayPal’s iOS app highlighting a so-called “PayPal Coin”. A rep said the code came from an internal hackathon, but the tea leaves as clear as to PayPal’s broader digital currency ambitions. Stay tuned for more.
  • Katie Haun is looking to raise nearly $900 million for a new venture firm. Haun, who joined a16z as a partner for its crypto investing unit in 2018, left the firm at the end of last year, as reported by Axios at the time. Now, Haun’s new firm —dubbed KRH— is in the process of raising the money across different venture funds, according to sources familiar with the investment firm’s plans. Haun has secured a16z as a limited partner for the new fund, according to sources. And the two firms are expected to have an informal relationship and collaborate together, a source said.
  • Coinbase, the first crypto exchange to issue stock publicly in the U.S., has had a rocky couple of months. Government data reveals that company insiders and early investors have been part of a significant selloff. Per beneficial ownership data gathered by the Securities and Exchange Commission and easier to browse on Dataroma, major players sold $40,631,394 worth of COIN over the course of December. The SEC requires these disclosures of company officers and directors, as well as any shareholders who possess 10% or more of the company’s outstanding stock. In the three months to date, total sales from insiders amounted to $331,744,516. Those insiders reported zero purchases during either timeframe.
  • A Congressional subcommittee is preparing a hearing to examine the environmental impact of cryptocurrencies, especially bitcoin mining, three sources with knowledge of the matter have told The Block. The Oversight and Investigations subcommittee of the House Energy and Commerce Committee is apparently working on a roster of witnesses to account for the energy use of proof-of-work crypto validation, especially the Bitcoin network. The timing and the witness list have yet to be determined, but the hearing could take place as soon as the end of the month. A source involved in pre-hearing discussions with the subcommittee told The Block that the broader committee has become especially concerned in light of recent events in New York State.
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News+ Spotlight
As crypto firms ramp up London advertising, regulators are hot on their trail
For the last nine months in central London, if you set foot inside the tube or saw a bus on the street, the chances are you would have seen some kind of crypto advertisement. 
New data obtained by The Block via a freedom of information request (FOI) from Transport for London (TfL) highlights a significant uptick in the number of crypto ads scattered across the capital over the course of 2021. The push to market crypto — both tokens and the means to buy them — intensified in April as UK COVID-19 restrictions began to ease, with ad volumes ramping up further towards the end of the year. 
Then, last month, the Advertising Standards Authority (ASA), an industry watchdog, issued a “red alert” on crypto marketing. In the absence of action by the Financial Conduct Authority, the ASA has been at the forefront of efforts to show a united front against misleading marketing. 
Despite this mandate, the impact of rulings seems to be largely symbolic and with few material consequences. The regulator has tended to move slowly, only issuing bans on certain ad formats reactively following complaints. 
“While they can’t impose monetary penalties on non-compliant advertisers, the ASA can and does refer uncooperative marketers to Trading Standards, which is the government body for protection against unfair trading,” said Anne Rose, managing associate in the commercial team and co-lead of the blockchain group at law firm Mishcon de Reya. She added that Trading Standards has the power to “impose a wide range of sanctions, including monetary fines.” 
So far, however, sanctions have amounted to little more than a slap on the wrist.
Read more in Lucy Harley-McKeown’s subscriber-only news feature.
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  1. Improved Fireblocks Network connectivity from 100 to 800+ trading venues and counterparties
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Follow the Money
  • Pantera Capital, an American hedge fund that manages over $6.4 billion in blockchain-related assets, has now reached $63.7 million in funding from 153 investors for its Bitcoin Feeder Fund, a Securities and Exchange Commission (SEC) filing shows.
  • MoonPay, the crypto payments firm valued at $3.4 billion, has this morning splashed 900 ether (roughly $3 million) on a rare item from the CryptoPunks collection.
  • Sygnum, a regulated crypto bank and asset manager, has raised $90 million in a Series B funding round. The firm is now valued at $800 million.
  • Livepeer, a decentralized video streaming platform built on the Ethereum blockchain, has raised $20 million in a Series B extension round.
  • The Incentive Ecosystem Foundation, a community-led foundation of Project Serum, has raised $75 million in a new funding round. Serum is a Solana-based decentralized exchange and liquidity infrastructure platform.
  • Investors poured $11.5 billion into the fintech sector globally in December, with 24 megarounds of over $100 million.
The Block Research – 2022 Digital Asset Outlook
In 2021, The Block Research produced more than 300 unique pieces of research for our research members. 
The 2022 Digital Asset Outlook Report, commissioned by GSR, looks at the most important cryptocurrency developments in 2021 and looks ahead to the future of the space in the coming years. 
The 160-page report covers 8 different sectors within the cryptocurrency industry to watch for in 2022:
  • The state of the market 
  • Investment trends 
  • Institutional custody 
  • Layer-1 and Layer-2 platforms 
  • Decentralized finance (DeFi) 
  • Web3 
  • NFT/Blockchain gaming 
  • Macroeconomics
Click here to download your copy today.  
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