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Afterparty raises $3M so creators can share NFT social tokens with fans – VentureBeat

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Afterparty has raised $3 million for its nonfungible token (NFT) platform for creators to engage with their fans and generate better revenues.
It’s part of its plan to enable a “creator economy,” where people make a living from streaming. Afterparty is making it easy for streamers and other creators to fashion their own social tokens based on NFTs, which use the transparency and security of the digital ledger of blockchain to authenticate unique digital items. That enables creators to issue NFT tokens to their fans.
The Los Angeles company is creating a decentralized platform, using Web3 (the blockchain web) technologies, to provide creators with the tools to monetize and manage their fan relationships, deliver live virtual experiences, and sell digital merchandise. Creators can mint and launch their own NFTs on the platform within minutes.
“We’ve really been focused on scaling up the platform,” said David Fields, CEO of Afterparty, in an interview with GamesBeat. “We just launched version two of the events experience with a really enhanced mobile experience. We’ve really focused on TikTok, YouTube, and Instagram creators. This is an underserved and under-monetized group. Many creators are making almost zero ad revenue from the platforms they’re on.”
Three top investment pros open up about what it takes to get your video game funded.
They can issue tokens to fans so they can get into “token-gated” virtual experiences such as VIP parties. And in contrast with Web 2.0 technologies like Instagram, the bulk of the revenue on the decentralized web goes to the creators, the company said. But most creators just don’t have the time to design, mint, and distribute their own NFTs, Fields said.
“We launched our creator tools to help creators who have launched NFTs and social tokens to build more lasting value,” Fields said. “Very few of them have launched NFTs on their own.”
Since NFTs can uniquely identify rare digital items, creators can issue one-of-a-kind collectibles to auction off to the biggest fans or just share as rewards for fan loyalty. Afterparty’s platform also gives creators the capability to host intimate, live experiences for their most dedicated fans. By January, Afterparty hopes to create a marketplace where users can sell their NFTs via the Ethereum or Polygon blockchains.
Above: Afterparty NFTs are digital items designed to look like jewels.
NFTs are thriving. If you look at Google Trends, you’ll see that NFTs started picking up in February and skyrocketed after related NFT sales like digital art and NBA Top Shot took off. Dapper Labs has now seen sales and resales of those NFTs top $780 million. In March, an NFT digital collage by the artist Beeple sold at Christie’s for $69.3 million. It sounds so dumb. The popularity of NFTs have exposed some serious drawbacks too in numerous scams where people steal art and sell it as their own NFTs. NFT sales hit $1.2 billion in the first quarter, $1.3 billion in the second quarter, and a whopping $10.7 billion in the third quarter as games such as Axie Infinity took off.
“NFTs are sitting at the foundation of Web 3 for the broader creator economy,” Fields said. “Most of the NFT activity has focused around digital artists to date. We’re very focused on this vertical of the creator economy.”
Above: Afterparty’s profile page for creators.
Afterparty has some NFT believers in the form of its investors. Acrew Capital and TenOneTen Ventures led the round, with participation from Palm Tree Crew, Act One Ventures, Hex Capital, Red Light Management, and angel investors including Dylan and Brandon Lee, Louis Beryl, Dave Bonanno, Craig Clemens, Reade Seiff, and Alex Kassan. The funding will be used to accelerate product development for its Web 3 platform, which provides creators with the tools necessary for direct monetization using NFTs.
“Our investment philosophy is formed around the idea of democratized wealth creation, which empowers more diverse groups to have a broader influence on market development and value generation,” said Lauren Kolodny, partner at Acrew Capital, in a statement. “Acrew’s same guiding principle represents the very essence of the new creator economy. Afterparty is undoubtedly at the forefront of this new creator era which makes their platform and team an exceptional investment fit.”
Afterparty got its beta test going in June, and it’s launching its own Ethereum-based NFT marketplace this fall. The creators can choose from many professionally designed NFT frameworks to make it easy to launch polished, visually appealing, one-of-a-kind NFTs that are authentic to their individual brand identity, according to the company. These NFTs tie in seamlessly to the events platform for creators to offer exclusive experiences and merchandise to collectors.
Fields is counting on the generation of gamers who have grown up buying skins and avatars. They’re spending their money around things that bring them value in digital spaces, he said.
The platform uses Layer 1 infrastructure (or solutions embedded in a blockchain’s basic protocol), based on the blockchain. The platform enables creators to choose from Ethereum, BitClout, and other emerging Layer 1s for their underlying NFT or social token, enabling them to capitalize on a more decentralized creator economy with a direct artist-to-fan relationship.
With Afterparty, creators have direct artistic and financial control of their NFT and social token offers through the platform’s blockchain-agnostic model. DJs, bands, and digital artists are using Afterparty.
The company is using the Polygon sidechain to eliminate gas fees, or those related to computing and energy costs. Fields said that nobody has been addressing what to do with NFTs after they’ve been sold for the first time. Afterparty is creating tools so creators can engage with fans in an ongoing dialogue and build deeper connections over time. It also wants fans to participate in a creator’s success over time.
Some of the NFTs are designed to look like jewelry, like custom watch pieces.
Above: Bryce Hall generated $12,000 in revenues at his first Afterparty event.
Creator Bryce Hall, who held his first Afterparty event on October 28, engaged with hundreds of fans through Afterparty. The event generated $12,000 in direct income. His social token market cap also increased by $250,000, all within 24 hours.
Afterparty will expand its virtual event series, where it just hosted six of the most influential global creators including Hall, Nick Austin, and others. These creators have built global communities on TikTok and recognize the value that Afterparty’s decentralized and direct monetization model brings to their growing success. Afterparty has built the creator tools to enable creators to deliver gated, exclusive experiences that can only be accessed with an NFT or social token they launch.
“I’m always looking for new ways to build deeper, more meaningful relationships with my fans, especially those who have supported me from the start,” said Bryce Hall. “Afterparty has really allowed me to connect with my true fans and build those relationships with them. It’s a brand new platform that helps creators generate more money so they can continue pursuing their passion while also giving fans an exclusive meeting place to connect with their favorite creators. There’s nothing really out there like it, and if you’re a creator or a fan, you should come to Afterparty.”
Above: David Fields is CEO of Afterparty.
Fields started the company this year with Dan Rahmel, chief technology officer, and Eytan Elbaz, chief strategy officer. The senior management also includes creator Robert Graham (head of talent) and musician Conner Frey (cozyboy) serving as front-end developer.
Their vision for the company is to merge their knowledge of the creator, music, and gaming industries and launch products that help creators build deep and authentic connections with their biggest fans.
Rivals include Cent and Clash, the maker of Drops. The company has 15 employees and it is hiring.
“I think you’re going to see a broader economy around entertainment, like when broadband internet arrived, and you’ll going to see a lot of exciting projects,” Fields said.
Afterparty is focused on delivering security because protecting digital assets is a must for the business, Fields said. The company has strong demand, and it will enter the live event space as well in the coming weeks.
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Tyler Hobbs' Fidenza NFT Project Gets $1M Pump Over 48 hours – CoinDesk

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DOJ Asks Congress for Tools to Limit NFT Money-Laundering Risk – PYMNTS.com

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Down at the very bottom of the crypto crime report the Justice Department issued last week was a request that could make it a lot harder to buy and sell NFTs.
Citing examples of criminals using the sale of the popular nonfungible tokens that hold art, video, music and collectibles to launder funds, the Justice Department asked Congress to define some of all NFTs as “value that substitutes for currency” under the Bank Secrecy Act (BSA).
Doing so, it said in “The Role of Law Enforcement in Detecting, Investigating, and Prosecuting Criminal Activity Related to Digital Assets,” would “make clear that its key [anti-money-laundering (AML) and countering the financing of terror (CFT)] provisions — including the obligations to have customer identification programs and report suspicious transactions to regulators — apply to NFT platforms, including online auction houses and digital art galleries.”
See also: DOJ Seeks to Double Jail Time for Money Transmission Crimes
The impetus, the department said, is the “explosive growth in the demand and corresponding markets for NFTs, perhaps most notably in the area of digital art.”
Substantial Risk
This “presents substantial money-laundering risks,” it said, citing a February Treasury Department study on money laundering in the broader art market.
“NFTs can be used to conduct self-laundering, a sequence in which criminals purchase an NFT with illicit funds and then resell to a purchaser who pays for it with clean funds unconnected to a prior crime,” that report noted.
It also found that in most cases, “digital assets that are unique, rather than interchangeable, and that are used in practice as collectibles rather than as payment or investment instruments … are generally not considered to be virtual assets under [international regulations].”
The “nonfungible” part of NFT means that each is unique and cannot substitute for any other, as opposed to cryptocurrencies like bitcoin which all have the same uses and value.
NFT marketplaces “may take the view that this definition [of a ‘value that substitutes for currency’] does not apply to their activities — and that they are thus not subject to the BSA’s anti money-laundering and anti-terrorism laws, the department said.
Justice is asking Congress to amend the BSA “to make clear that its key AML/CFT provisions — including the obligations to have customer identification programs and report suspicious transactions to regulators — apply to NFT platforms, including online auction houses and digital art galleries.”
Already There
Redefining NFTs as “value that substitutes for currency” would allow the Treasury Department’s Financial Crimes Enforcement Unit (FinCEN) to “potentially seek to regulate such activity under its money transmission regime,” a trio of lawyers at Skadden, Arps, Slate, Meagher & Flom wrote in an April blog post.
That, according to Jamie Boucher, Eytan Fisch and Javier Urbina, would require NFT marketplaces to register as money services businesses (MSB) with FinCEN.
Some types of NFTs — notably those used to fractionalize tangible assets like physical artworks and real estate, but also other valuable art or collectible tokens — are likely securities, the Securities and Exchange Commission (SEC) has said.
See more: How Did NFTs Become SEC’s Newest Crypto Target?
In FinCEN’s view, the trio noted, those can be repurposed to fit the definition of “value that substitutes for currency” and thus may already require MSB licenses.
 
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FTX Talking With Investors for $1B Fundraising at $32 Billion Valuation – NFTgators

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Quick take:
Although Binance maintains its number one spot in terms of crypto transaction volume, FTX is catching up quick after rising to third, behind Coinbase. This could change soon given the steps FTX is taking in web3.
According to reports, Sam Bankman-Fried’s company is seeking $1 billion in a new round of funding at a valuation of about $32 billion. That values FTX twice the value of Coinbase— whose market cap stands at just over $14 billion, and at least 7-fold Binance’s most recent valuation of $4.5 billion.
And there is a good reason for the disparity in market share (volume-wise) and overall valuation. FTX is more than just a crypto exchange platform. 
The company has expanded its ecosystem to include stock trading, NFTs, crypto lending services and more, all forming significant operational synergies for the rapidly growing web3 company.
It explains why investors are placing such value on FTX. According to sources close to the $1 billion fundraising talks, the figure could change by the time the round is closed, CNBC reported, citing people who did not want to be named.
FTX has been one of the most active investors in the web3 space during the crypto winter. The company is in the process of acquiring the crypto lending platform Blockfi for a reported amount of $240 million.
Last year, it acquired crypto derivatives platform LedgerX allowing it to offer derivatives trading alongside traditional crypto exchange services.
Earlier this year, the company purchased Good Luck Games, the developer of the card battle game Storybook Brawl for an undisclosed amount. The acquisition added another perspective to FTX’s business pouncing on the rapidly growing web3 gaming sector.
The company also recently announced a partnership with online game retailer Gamestop to onboard the gaming community to web3.
In July, Bankman-Fried refuted claims that FTX was planning to buy retail stock brokerage platform Robinhood after Bloomberg published a report suggesting discussions were underway.
News about the new fundraising come hot on the heels of the company’s $900 million raise announced in July. FTX also raised $420 million in October 2021.
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