How Algorand raised $200 million after its token tanked

Algorand, the feted project of Silvio Micali, a professor at MIT and a recipient of the Alan Turing award, officially launched its mainnet in late June after raising $66 million in funding. It promised a pure Proof-of-Stake blockchain that is fast, secure, and truly decentralized. Investors lapped it up, and gave it a market cap of $24 billion. 

But Algorand’s token, Algo, tanked as soon as it launched on the exchanges: the token started at $3.28 and was the worst-performing token on the Binance exchange in July, falling over 60 percent in value. August was even worse, and the token rests at around $0.35, about 90 percent weaker than its initial value.

But Algo Capital, a financial company investing in companies that run on the Proof-of-Stake blockchain Algorand, announced last week the closing of its Algo VC Fund at $200 million. The fund will invest in companies that will further the access, adoption, and liquidity of the Algo, the native digital currency of the Algorand blockchain. 

But why on earth would investors continue to flog a dead horse by pumping hundreds of millions of dollars into the economy via Algo Capital? After all, the $200 million fund closed after investors' fortunes crumble into worthless Algos. 

Facebook's Libra to ask Swiss regulator for payment license

The Libra Association—set up to run Facebook’s Libra—announced today it will apply to become a licensed payment system, under the Swiss Financial Market Supervisory Authority (FINMA). At the same time, it has asked the regulator to provide more clarity on how it plans to handle the Libra cryptocurrency.

Ever since Libra launched, it has been beset by skepticism from governing bodies and financial regulators around the world. In response, the association has reiterated its commitment to work with regulators.

While Switzerland is home to the headquarters of dozens of global companies, Libra Association's decision to base the project in a country that has made disclosing the banking activities of the wealthy illegal has raised some eyebrows. Congresswoman Maxine Waters—who called for a moratorium to halt the project—recently traveled to Switzerland to examine how Libra would work.

While questions circle around Facebook's ability to keep its existing datasets secure, and governments, including the US are busy drafting legislation to keep big tech out of finance, the Libra Association is forging ahead with the cryptocurrency-based payments network.

Here are the biggest stories in the cryptoverse:

• Mastercard partners with R3 to build a cross-border payments system.   
• BitPay suspends BTC donations to Hong Kong News outlet.
• Pundi X readies its smartphone that will be blockchain-powered. 
• Libra vulnerability patched after vulnerability discovered.

Blockstack nets $23 million in historic SEC-qualified token sale

What you need to know

Who says playing by the rules doesn’t pay.

Blockstack, the first crypto startup to receive the SEC’s blessing to conduct an ICO-like offering of its blockchain-based tokens to anyone in the world, today announced the results: $23 million across two sales.

Specifically, the Ethereum competitor raised $15.5 million through a Regulation A+ sale of just over 74 million Stacks tokens to mom and pop retail investors in the United States, and another $7.6 million in the sale of 30 million tokens to investors overseas through Regulation S, according to an SEC filing.

Why it's important

The Reg A+ portion of the sale in the U.S. marked the first time that non-accredited investors in the States could legally take part in an ICO, as far as the U.S. Securities and Exchange Commission is concerned.

“Our goals for working with regulators in the States were twofold,” said Blockstack CEO Muneeb Ali in a statement. “Primarily, we wanted to reach more retail investors who can be users of our network, and have a financial stake in the success of our ecosystem. Secondly, we identified Asia as a priority market, and our SEC qualification added weight to our strategic move toward Asia.”

Substratum burns through $13 million in two years

Substratum entered the crypto scene in 2017 with big dreams—a vision to recreate a “a free and fair Internet.” And it raised some big money to do it.

The company raked in $13.8 million in a token sale during the ICO gold rush.

Now, Substratum is broke. And some investors are crying foul.

The company announced in a Medium post yesterday that it is now entering a “transition” phase after draining its coffers of the nearly $14 million it raised in an ICO less than two years ago. So far, Substratum has laid off 40 percent of its employees in its Ohio office, and will eventually be closing it altogether, migrating those remaining onboard to their Tennessee location. 

Read more here.