The Cross-Chain Protocol Wormhole Raises $225 Million at $2.5 Billion Valuation
The cross-chain protocol Wormhole has successfully raised $225 million in funding, valuing the platform at $2.5 billion. Investors such as Coinbase Ventures, Multicoin Capital, and Jump Trading, which incubated the defi protocol under its digital asset division Jump Crypto, participated in the fundraising round.
Token Warrants Instead of Equity
Instead of offering equity, Wormhole issued token warrants to investors. These warrants ensure that investors will receive a designated amount of a crypto token when the protocol launches it.
Separation from Jump Trading
Wormhole’s fundraising event marks the final step in its separation from Jump Trading. This move was prompted by regulatory scrutiny in the US and security breaches suffered by the blockchain messaging tool. Additionally, Wormhole now operates under the administration of Wormhole Labs.
“Wormhole itself is now completely separated from Jump.”
– Dan Reecer, Wormhole Foundation COO
New Direction for Wormhole
With the fresh capital raised, Wormhole plans to enhance its industry reputation and embark on a new path. The platform aims to recover from a previous hack where approximately $320 million was stolen. During that incident, Jump Crypto provided emergency funds to cover the shortfall and later recovered the stolen assets with assistance from Oasis, a defi service provider.
Downsizing Crypto Operations
In addition to its separation from Wormhole, Jump Trading is also downsizing its crypto operations. This decision comes after Terraform Labs collapsed and legal actions alleged that the firm inflated the price of Terra’s UST token to generate $1.3 billion. Kanav Kariya, President of Jump Crypto, invoked his Fifth Amendment rights during questioning by the Securities and Exchange Commission (SEC).
The SEC complaint also referenced an unnamed US trading firm involved in UST’s price manipulation, leading to speculations about Jump’s potential involvement.
Hot Take: Wormhole Raises $225 Million to Forge Its Own Path
Wormhole, the cross-chain protocol, has successfully raised $225 million in funding at a valuation of $2.5 billion. The platform’s separation from Jump Trading is now complete, allowing it to chart a new course after facing regulatory scrutiny and security breaches. With this fresh capital, Wormhole aims to rebuild its industry reputation and recover from a previous hack that resulted in the theft of approximately $320 million. Meanwhile, Jump Trading is downsizing its crypto operations following legal actions surrounding Terraform Labs and allegations of price manipulation. Wormhole’s successful fundraising marks a significant milestone as it establishes itself as an independent entity.
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