Following the SBF trial, 3AC arrest and Q3 web3 funding drops

Welcome back to Chain Reaction.

To get a roundup of TechCrunch’s biggest and most important crypto stories delivered to your inbox every Thursday at 12 p.m. PT, subscribe here.

I’ve been taking a bit of an electronics detox, meaning I haven’t been looking at my phone — or laptop — for most of this week. As a reporter, that seems ridiculous. But when I say I’ve spent the past few days in the Southern District of New York (SDNY) federal court, that might make more sense, given that they confiscate most people’s electronics (as I learned, this includes AirPods!).

The SDNY is becoming a second home for me because the highly anticipated trial for Sam Bankman-Fried, often referred to as SBF, has begun. If you don’t know who he is or what he’s allegedly done, we’ve got a refresher for you.

Before FTX collapsed and filed for bankruptcy, Bankman-Fried also apparently had a plan to buy off former President Trump, to get him to not run for re-election, author Michael Lewis shared in a 60 Minutes broadcast interview. How much would that cost? Apparently, $5 billion.

I’ll be in-and-out of the courthouse over the next six weeks, following the trial closely. Prosecutors shared that Matt Huang, co-founder and managing partner of Paradigm, and Gary Wang, co-founder of FTX, are on the docket to testify this week as witnesses.

Prior to Paradigm, Huang was a partner at Sequoia Capital; both firms previously invested in FTX, so we imagine the testimony will dive into investors’ losses from the crypto exchange’s downfall.

As for Wang, well, he co-founded FTX with Bankman-Fried but agreed to take a plea deal in December 2022. This means Wang is cooperating with authorities in exchange for a better sentencing, which the judge presiding over the case mentioned to jurors on Wednesday.

For the most in-depth trial coverage to date, check out everything that has transpired below.

The SBF Trial

1. SBF’s trial has started, this is how he and FTX got here
2. Was FTX an empire ‘built on lies’ or a startup that ‘grew too quickly’? (TC+)
3. SBF’s trial promises to be just as riveting as the rest of the FTX drama (TC+)
4. US government confirms it didn’t offer any plea deals to Sam Bankman-Fried
5. Meet the 12 jurors on Sam Bankman-Fried’s trial

This week in web3

1. Three Arrows Capital co-founder Zhu arrested in Singapore airport, sentenced four months in prison
2. Web3 funding is down again as the crypto winter drags on (TC+)
3. Kenyan legislative committee calls for Worldcoin shutdown in the country
4. Pudgy Penguins’ approach may be the answer to fixing NFTs’ revenue problems (TC+)

The latest pod

For this week’s episode, Chain Reaction (and Jacquelyn) did a crossover episode with Alex Wilhelm, editor in chief of TechCrunch+ and co-host of Equity, TechCrunch’s podcast focused on the business of startups.

The highly anticipated criminal trial for Sam Bankman-Fried, former CEO of now-bankrupt crypto exchange FTX, started on Tuesday to determine whether he’s guilty of seven counts of fraud and conspiracy.

Jacquelyn has been on the ground at the Southern District of New York courthouse, listening in to the trial in the same room as Bankman-Fried, so there was lots to talk about.

We dove deep into what transpired the first two days of Bankman-Fried’s trial, as well as who the jurors are, the first two witnesses and who else is expected to speak. We also got into the nitty-gritty details, which you can’t read about on a transcript.

Subscribe to Chain Reaction on Apple Podcasts, Spotify or your favorite pod platform to keep up with the latest episodes, and please leave us a review if you like what you hear!

Follow the money

1. Resy and Eater co-founder raises $24 million for Blackbird, a restaurant loyalty platform
2. Web3 social app Phaver raised $7 million from Polygon Ventures and others
3. Cicada, a credit risk firm focused on blockchain infrastructure, raised $9.7 million
4. DeFi derivative lending platform ParaFinance raised $5 million
5. Web3 esports startup NexGami raised $2 million in seed funding

This list was compiled with information from Messari as well as TechCrunch’s own reporting.

What else we’re writing

Want to branch out from the world of web3? Here are some articles on TechCrunch that caught our attention this week.

1. The global VC market continues to stumble (TC+)
2. Three weeks later, investors are still not terribly enthusiastic about the massive Cisco-Splunk deal (TC+)
3. What’s at stake in the Supreme Court’s landmark social media case
4. AWS, Microsoft and Google face UK competition probe over cloud lock-in practices
5. At One Ventures’ $375 million new fund shows climate tech is still hot (TC+)

Follow me on Twitter @Jacqmelinek for breaking crypto news, memes and more.