The Daily: Matter Labs Lays Off Staff Amid Declining ZKsync Demand, SEC Charges Galois Capital, Others

Happy Tuesday! In today’s newsletter, Matter Labs is laying off 16% of its staff. GK Sync ZK

-3.45%
Demand has dropped, the SEC has filed charges against Galois Capital for custody issues, and the WazirX hacker has moved $6.5 million worth of Ether to Tornado Cash.

Let’s get started.

Matter Labs Cuts Staff by 16% Due to Declining ZKsync Demand

Matter Labs, the developer of ZKsync, laid off about 16% of its staff on Tuesday due to changing market conditions and business needs throughout 2024, according to CEO Alex Gluchowski.

• For most of this year, zkSync Era has consistently maintained the highest 7-day moving average among ZK-based exchanges. Ethereum Ethereum

  -2.74%
  Two-layer network.

• However, activity has declined in recent months since the project airdropped its ZK tokens in June, falling behind Linea and Scroll.
• The number of active ZKsync addresses has also declined significantly since topping 455,000 in April, falling to around 93,000 as of Monday, according to The Block’s data dashboard.
• “We went through a massive organizational planning process, and it became clear that the talent and roles we had in place were not a perfect fit for our needs,” Gluchowski wrote in X.
• “We then reviewed every role in the company to make sure we had the right people in the right roles to remain agile and effective.”
• According to Tracxn, Matter Labs has raised $458 million in four funding rounds since its founding in 2018.

SEC Charges and Settles with Crypto-Focused Galois Capital Over Custody Issues

The Securities and Exchange Commission has filed charges and settled with Galois Capital, a cryptocurrency-focused investment advisory firm, over the way it handled client assets.

• The SEC said in a statement Tuesday that the allegations primarily relate to private equity funds that invested in cryptocurrencies.
• The SEC accused Galois Capital of violating custody rules, putting investors at risk of loss, misuse or embezzlement of their assets.
• Galois Capital neither admitted nor denied the charges, but settled with the SEC and agreed to pay a $225,000 civil penalty, which will be distributed to fund investors.

WazirX Hacker Moves $6.5 Million Worth of Ether to Tornado Cash

According to security firm PeckShield, the WazirX hackers are believed to have transferred 2,600 ETH ($6.5 million) to the approved cryptocurrency exchange Tornado Cash on Tuesday for the purpose of laundering money.

• Using mixers like Tornado Cash is a common tactic used by cybercriminals to hide the origin of stolen cryptocurrency and make it difficult to trace.
• WazirX reported a cyberattack on July 18, which resulted in the loss of over $230 million from its multi-signature wallets and freezing withdrawals, limiting the possibility of recovery.
• North Korea’s Lazarus Group, notorious for running notable malware, is believed to be behind the hack.

Web3 security company Hypernative raises $16 million

Hypernative has raised $16 million in a Series A funding round led by Quantstamp, another Web3 security company, and the equity-based round brings its total raised to $27 million, co-founder and CEO Gal Sagie told The Block.

• Hypernative provides a real-time risk monitoring platform designed to detect and prevent hacks using AI, serving over 120 clients including Uniswap, Solana, Chainlink, and more.
• Since its launch in September 2022, Hypernative claims to have saved over $100 million in funds and detects 99.5% of hacks with a false positive rate of less than 0.001%.
• The company plans to use the new funding to expand its presence in Asia Pacific and the Americas markets and add to its current 30-person staff.

Scottish court seizes Bitcoin belonging to ‘brain’ of machete cryptocurrency robbery

According to a BBC report, a Scottish court has seized £110,000 ($144,000) worth of Bitcoin from John Ross Rennie, who was convicted in 2020 of being the “technical brains” behind an assault and cryptocurrency robbery.

• According to the report, the victim “waked up to find a man with a machete looking down at him and demanding he transfer cryptocurrency.”
• This case marks the first time in Scotland that police have successfully tracked down and seized cryptocurrency stolen following a robbery, and prosecutors have converted the funds into cash.

within the next 24 hours

• U.S. mortgage data is released Wednesday at 7 a.m. ET. U.S. JOLT job openings figures are released at 10 a.m. ET.
• Korea Blockchain Week continues in Seoul.

Don’t miss a beat with The Block’s daily roundup of the most impactful events happening across the digital asset ecosystem.

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