ARK drops bid for spot Ether ETF, miners adapt after halving, and more

In a sudden decision, investment firm 21Shares submitted a filing to the Securities and Exchange Commission in the late afternoon of Friday, May 31, to rename its proposed spot Ether (ETH) exchange-traded fund (ETF) and to remove ARK Invest from the application.

A spokesperson for ARK Invest later confirmed the firm decided not to move forward with the crypto product, citing a need to reassess its investment strategy. The move raised concerns among the crypto community concerning the short-term viability of the newly approved ETFs.

During an interview on June 5, United States Securities and Exchange Commission (SEC) Chair Gary Gensler suggested a delay in final approvals for asset managers. ETFs will “take some time,” said Gensler. The SEC has yet to sign off on S-1 registration statements from applicants.

ARK Invest and 21Shares will remain partners on their spot Bitcoin (BTC) ETF, launched in January.

This week’s Crypto Biz also explores Galaxy Digital’s tokenized loan for Animoca Brands, Avail’s fundraising, the Toposware acquisition, and Bitcoin miners’ first reports since the halving.

Galaxy Digital uses historic violin NFT to secure loan

Michael Novogratz’s Galaxy Digital and Animoca Brands co-founder Yat Siu have tokenized a Stradivarius violin from 1708 to use as collateral for a multimillion-dollar loan. On June 4, Galaxy reportedly lent an undisclosed amount of funds to Siu, who used the 316-year-old violin he owned as collateral. The digital assets firm turned the violin into a nonfungible token (NFT) and will hold the NFT and the physical version until Siu settles the loan. The violin once belonged to the Russian Empress Catherine the Great.

Polygon Labs acquires Toposware, pushing total ZK investment to $1 billion

Polygon Labs has acquired the blockchain research and engineering company Toposware, its third zero-knowledge (ZK) startup investment in three years. Toposware has been working with Polygon on the Type 1 Prover, enabling Ethereum-compatible blockchains to use zero-knowledge proofs with minimal modifications. The acquisition adds 11 Toposware engineers to Polygon’s ZK teams and increases Polygon’s total investment in ZK technology to over $1 billion, following their $650 million acquisition of Mir and Hermez in 2021.

Bitcoin halving impacts miner Riot’s revenue by 43% despite new facility

Bitcoin miner Riot Platforms produced 215 BTC in May, a 43% decrease from last month despite expanding its fleet. The decrease is a direct impact of the Bitcoin halving on the mining industry, which halved the mining rewards to 3.125 BTC. Riot preplanned an infrastructure upgrade to retain production post-halving with a new facility in Corsicana, Texas, which added 3.1 exahashes per second to its total self-mining so far — a 17% increase from the previous month. Also, after adjusting its operations after the halving event, Marathon Digital sold 63% of its BTC production in May.

Avail secures $43 million in Series A for Web3 unification

Avail, a modular blockchain base layer, has recently completed an oversubscribed $43 million Series A round. The Series A funding saw participation from multiple venture capital firms and angel investors, including Altos Ventures, Alliance DAO, Hashkey, Elixir Capital, Spark Digital Capital and RW3 Ventures, among others. In total, the company has raised $75 million across various funding rounds. Avail is headed by Arjun, a co-founder of Polygon, who aims to address three major challenges within the Web3 ecosystem: blockchain fragmentation, insufficient data availability and limited scalability.

Before you go: Franklin Templeton CEO Jenny Johnson believes we are still in the early days of the Bitcoin investment cycle and that big institutional money has not yet been fully deployed into the asset class.

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