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Meta4 Capital will invest up to $100M in rare NFTs – VentureBeat

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Meta4 Capital has created a new fund to invest up to $100 million in rare nonfungible tokens (NFTs).
The minority-owned fund has backing from Andreessen Horowitz, one of the biggest and most-connected venture capital firms in Silicon Valley. Meta4 Capital is being set up by Fund Management, a cryptocurrency-focused investment management company.
Miami-based Meta4 Capital’s managing partners are Brandon Buchanan and Nabyl Charania. The fund is still raising the rest of the $100 million, but it didn’t say how much of it will be bankrolled by Andreessen Horowitz. The firm has some form of commitment for about a quarter of the targeted fund so far, with more closing in the coming months.
The fund said that NFTs have become the “most interesting, entertaining and lucrative subsection of the cryptocurrency asset class.” NFTs use the transparent and secure digital ledger of blockchain to authenticate unique digital items.
Three top investment pros open up about what it takes to get your video game funded.
The market for NFTs surged to new highs in the third quarter of 2021, with $13.2 billion in sales in the first nine months of the year, according to DappRadar. NFTs have exploded in other applications such as art, sports collectibles, and music. NBA Top Shot (a digital take on collectible basketball cards) is one example.
Above: An example of NFT art.
Published by Dapper Labs, NBA Top Shot has surpassed $780 million in sales in just a year. And an NFT digital collage by the artist Beeple sold at Christie’s for $69.3 million. Investors are pouring money into NFTs, and some of those investors are game fans. The weekly revenues for NFTs peaked in May and then crashed, but in August and September, those revenues rose again, fell, and then held steady. And while critics have said the market will crash as soon as the hype dies down, the percentage increases for NFT sales from a year ago are huge.
Above: Brandon Buchanan is cofounder of Meta4 Capital.
It may seem like a crazy thing for a fund to invest in rare NFTs, which could be overhyped and not worth it. But here’s the thing. You don’t really bet against Marc Andreessen and Ben Horowitz.
The vote of confidence from their firm Andreessen Horowitz could go a long way, as the firm has put money into Coinbase, Dapper Labs, and AirBnb among others. The fund will invest in digital art and collectibles (i.e., Bored Ape Yacht Club), gaming-related NFTs (i.e, Zed Run), and metaverse-related purchases (i.e., virtual land).
“NFTs are the driving force behind a new generation of internet products and services that are sharing value directly between the millions of developers, artists, collectors, and even gamers that participate — rather than platforms that simply act as a middleman,” Arianna Simpson, general partner at Andreessen Horowitz said in a statement. “The Meta4 Capital team has a unique, proven pulse on the NFT market and across the web3 spectrum, and we’re thrilled to partner with them on this new fund.”
Above: More NFT art
Earlier this year, Meta4 Capital launched and deployed its pilot vehicle, Meta4 Capital LLC, with a mandate to buy digital art and collectibles, purchase virtual land, and trade NFT-related cryptocurrencies. That vehicle acquired dozens of non-fungible tokens from various projects, including CryptoPunks, Bored Ape Yacht Club, Meebits, Gutter Cat Gang, Zed Run, and Sandbox among others.
“Meta4’s thesis is built around the transition to Web 3.0, and we believe NFTs are at the intersection of tech, finance, art, and culture,” said Buchanan, in a message to VentureBeat. “We want to give investors a way to participate in this burgeoning asset class and be an example for minorities looking to get into the space, since they are underrepresented as investors and similarly as participants in the asset class.”
Above: Nabyl Charania is the cofounder of Meta4.
Meta4 was founded on the belief that NFTs are an example of a more intelligent internet or Web3. Web3 represents how technologies have matured the web as we know it from being a place of information and connection into decentralized networks with powerful capabilities. One of its guiding technologies is blockchain.
“NFTs are more than just pixels. It’s the intersection of culture, technology, and finance,” said Buchanan, in a statement. “It represents a new way of thinking about the ways in which ‘value’ is accrued, harnessed, and distributed. We are witnessing the disintermediation of intellectual property and where things are ultimately headed in web3 as a result of blockchain technology.”
One of, if not the most, impressive outputs of this change is the shift to co-creation, the fund said. This means creators of content have a direct relationship with consumers of that content and earn benefits of their content directly, with immediacy and regardless of future ownership of that content, while consumers enjoy an expanded relationship of value with the content creator.
“NFTs demonstrate a shift in the flow of value directly to the creator at a scale that has never been seen before,” said Charania, in a statement. “On top of that, NFTs further enable users to become investor-partners aligned with creators. This is the internet evolution that we have been eagerly awaiting, with NFTs marking the dawn of web 3.0 and the immersive internet.”
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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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