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Crypto’s crown prince stumbles

Welcome back to Chain Reaction.

Last week on the podcast, we talked about trouble brewing for bitcoin miners. This week, we had to tear up our plans to cover pretty much anything else and turn our attention to what we think is the biggest story in crypto to unfold this year: the fall from grace of once-revered crypto exchange FTX and its former billionaire founder Sam Bankman-Fried (SBF).

Do you want Chain Reaction in your inbox every Thursday? Sign up here: techcrunch.com/newsletters.

this week in web3

Here are some of the biggest crypto stories TechCrunch has covered this week.

Sam Bankman-Fried says FTX in talks to raise capital, Alameda Research to wind down trading

Sam Bankman-Fried said on Thursday that he will be winding down the trading firm Alameda Research and is attempting to raise liquidity for the troubled FTX International, as he scrambles to keep the world’s second largest crypto exchange alive after a bailout deal with Binance failed earlier this week. Bankman-Fried said in a series of tweets that he is engaging with a “number of players” to raise capital for FTX’s international business and those discussions are at various stages, including letters of intent and term sheet deliberations.

Troubled crypto exchange FTX investigated by US regulators over customer funds

Crypto trading behemoth FTX fell from grace this week after the exchange experienced a liquidity crunch and agreed to give its rival, Binance, the option to purchase the company’s non-U.S. operations in what appears to be a bailout. Now, U.S. regulators, including the SEC and CFTC, are looking into whether FTX potentially mishandled customer funds on its platform. 

Say hello to the newest crypto startups from web3 accelerator Alliance DAO’s demo day

New crypto startups forged ahead during Alliance DAO’s demo day on Wednesday amid the FTX implosion. The most recent cohort, known as All9, for Alliance DAO, a web3 accelerator and builder community, presented their ideas on Wednesday during a demo day, exclusively covered by TechCrunch.  There were about 953 applications for this cohort, but only 17 teams were chosen and graduated from the program.

Sequoia Capital marks its FTX investment down to zero dollars

Sequoia Capital just marked down to zero the value of its stake in the cryptocurrency exchange FTX — a stake that accounted for a minor percentage of Sequoia’s capital but as of last week likely represented among the most sizable unrealized gains in the venture firm’s 50-year history. It alerted its limited partners in a letter that it sent out to them this evening, a copy of which TechCrunch obtained and shared in this article.

Some crypto VCs see decentralization as the future following FTX collapse (TC+)

As the crypto market digests the past few days of chaos, venture capitalists see the moment as a warning, but also as an opportunity for the growth of decentralization and maturation of the larger blockchain space. TechCrunch spoke with some investors to understand their long-term view of the industry following this week’s news from FTX.

the latest pod

We had to talk about the news that rocked the crypto world this week in our Thursday episode: the Binance/FTX deal that never was. To begin, we gave you a rundown of WTF just happened with the beef between two of the largest crypto exchanges in the world and how Sam Bankman-Fried’s storied exchange fell so far so fast, bringing down investors, cryptocurrencies and other companies in the space tumbling down with it.

Once we ran through the background behind the situation that’s been unfolding in real time this week, we shared our thoughts on the massive implications this fiasco might have for the rest of the crypto industry, from venture capitalists and startups to regulation across the globe.

It’s a fascinating backdrop for our conversation at our crypto event in Miami next week, where we’ll be chatting with Binance CEO Changpeng Zhao (CZ), the billionaire who is seen as the catalyst for FTX’s downfall. You can use the promo code REACT for 15% off a General Admission ticket to the event to hear from CZ and plenty of other crypto market players about what the future of this tumultuous industry might hold in the coming months.

Chain Reaction comes out every Tuesday and Thursday at 12:00 p.m. PT, so be sure to subscribe to us on Apple Podcasts, Spotify or your favorite pod platform to keep up with the action.

follow the money

  1. Web3 messaging infrastructure platform Notifi raised a $10 million seed round co-led by Hashed and Race Capital.

  2. Web3 API provider Ramp secured $70 million in a Series B funding round, co-led by Mubadala Capital and Korelya Capital.

  3. Blockchain fraud prevention startup TRM Labs expanded its Series B funding round by $70 million led by Thoma Bravo with participation from existing investors PayPal, American Express and Citigroup.

  4. Eterlast emerged from stealth with $4.5 million to develop web3 games for sports fans.

  5. Decentralized search engine Sepana raised $10 million from Hack VC, Pitango First and others.

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

Hear CZ for free at TC Sessions: Crypto

Who better to give an insider take on the recent Binance/FTX news than Binance chief executive CZ himself? Score a free ticket, get the lowdown and explore the many conversations and networking opportunities at TC Sessions: Crypto on November 17 in Miami. The first 25 readers to register with this will join us in Miami on November 17 for free!