With crypto markets continuing to trade sideways, the focus is on how the space is positioning itself for the future. There were more than 205 VC deals during September, attracting around $2.3 billion in VC fuding. That’s higher than August’s numbers — which saw around 145 deals amassing $1.8 billion — but still overall crypto funding has fallen for a second consecutive quarter, the first time since 2018.

The two most popular investment categories in September were NFT/blockchain gaming and infrastructure — same as the last month — drawing a total of more than $1.4 billion in funding.

Over the past week, Uniswap Labs, the company behind the leading DEX Uniswap, raised a whopping $165M in a Series B fundraising round. This round was led by Polychain Capital, included Andreessen Horowitz, Paradigm, SV Angel, and Variant Fund giving Uniswap a $1.7B valuation.

On the institutional front, one of the world largest and oldest custodian banks , BNY Mellon announced its digital assets custody platform that will hold BTC and ETH. The bank has plans to launch the industry’s first multi-asset platform that bridges digital and traditional asset custody.

The regulatory debate continued with a new investigation into Yuga Labs, the NFT juggernaut behind the Bored Ape Yacht Club and other splashy collections. SEC officials are reportedly investigating whether NFTs issued by the company should be subject to similar disclosure rules to traditional securities such as stocks. The SEC is also looking into the distribution of ApeCoin. For deep dive on securities law and its application to the crypto space have a look at this weeks long read “Ethereum’s New ‘Staking’ Model Does Not Make ETH A Security” from Paradigm.

The Financial Stability Board, a collection of central bankers and financial regulators from across the G20 countries, warned that stablecoins aren’t stable in a new report. The report suggested that stablecoins “do not have credible mechanisms to support their promise of price stability” citing risks around redemptions and ability to maintain pegs in situations of market turmoil. Although, many observers could suggest the same lack of credible mechanisms and questionable central bank decisions given the volatility in today’s currencies and inflation readings.

Lastly, staying with stablecoins, Tether, the company behind USDT, crypto’s largest stablecoin with a market capitalization of $69B, has completely eliminated commercial paper from its reserves.

USDT is a stablecoin backed 1:1 by fiat dollars, but its reserves have been called into question many times over the years, including by the office of the New York Attorney General (NYAG). By getting rid of commercial paper in favor of less-risky T-Bills, the company is undoubtedly looking to assuage any lingering doubts.

Major headlines:

BNY Mellon Launches New Digital Asset Custody Platform

September crypto VC roundup: Funding slightly increased from previous month

Uniswap Fulfills its Unicorn Destiny with $165M Funding Round

SEC Probing Yuga Labs’ Issuance of NFTs and Token: Report

G20 central bankers warn stablecoins aren’t ‘stable’, recommend action around crypto assets

Tether Drops Commercial Paper From USDT Reserves

EU’s landmark digital asset legislation passes committee vote in European Parliament

Mango Markets exploiter comes clean, claims all actions were legal

Big read:

Ethereum’s New ‘Staking’ Model Does Not Make ETH A Security.

Chart of the week:

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