opinion

Crypto SWOT: The detention of Telegram founder Pavel Durov has shaken the crypto venture capital sector

Kitco Media
By Frank E Holmes
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Crypto SWOT: The detention of Telegram founder Pavel Durov has shaken the crypto venture capital sector teaser image

Strengths

  • Of the cryptocurrencies tracked by CoinMarketCap, the best performer for the week was Akash Network, rising 5.33%.
  • Bitcoin touched $65,000 for the first time in about three weeks, writes Bloomberg, aided by revived demand for U.S. spot Bitcoin ETFs and signs that the Federal Reserve is set to loosen monetary policy. Bitcoin rose as much as 1.2% to start the week and has since fallen back slightly, closer to $60,000 on Friday.

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  • Digital asset manager ParaFi Capital, backed by KKR co-founder Henry Kravis, raised $120 million to invest in general-partner stakes in other crypto funds, reports Bitcoin.com. The aim is to build a portfolio of 30 to 50 stakes over the next three to five years as the crypto-fund landscape grows. 

Weaknesses

  • Of the cryptocurrencies tracked by CoinMarketCap, the worst performer for the week was Notcoin, down 22.55%.
  • The detention of Telegram founder Pavel Durov has shaken the crypto venture capital sector, writes Bloomberg, particularly those who invested in Toncoin, a token linked to the Telegram app. The token’s value has plummeted amid concerns over the app's future due to Durov's legal troubles.
  • Binance Japan's CEO, Takeshi Chino, indicated that launching a stablecoin in Japan by the end of the year is challenging, with a dollar-denominated stablecoin now likely delayed until the first half of 2025.

Opportunities

  • Despite recent setbacks with exchanges withdrawing applications, there is a 70% chance the SEC will approve options on spot Bitcoin ETFs by May, following additional input from the OCC and CFTC.
  • MakerDAO, one of the oldest decentralized finance platforms, is rebranding as Sky to attract more mainstream users. The platform has plans to launch new tokens and simplify the user experience as part of its broader growth strategy.
  • Solayer Labs, the developer of the Solana restaking protocol, raised $12 million in a seed funding round led by Polychain Capital, bringing its valuation to $80 million. Solayer Labs aims to expand its team, integrate new protocols, and eventually launch a native token.

Threats

  • The U.S. SEC has settled with crypto lending platform Abra after charging the startup with selling unregistered securities to consumers and operating as an unregistered investment company, reports Bloomberg. Plutus Lending LLC agreed to settle with the SEC without admitting or denying the agency’s allegations.
  • Big law firms have earned over $750 million in legal fees from cryptocurrency-related bankruptcies since 2022, with the work nearing completion as most cases wrap up. This includes major cases like FTX, Genesis and Terraform Labs.
  • OpenSea has received a Wells Notice from the SEC, signaling potential legal action over allegations that the NFTs on its platform are unregistered securities, making it the latest crypto company to face regulatory scrutiny.
Kitco Media

Frank E Holmes

Frank Holmes is CEO and chief investment officer of U.S. Global Investors, Inc., a boutique investment advisory firm based in San Antonio that manages domestic and offshore funds specializing in the natural resources and emerging markets sectors. The company’s no-load mutual funds include the Global Resources Fund (ticker PSPFX), the World Precious Minerals Fund (UNWPX) and the Gold Shares Fund (USERX).

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