Oh god, even VCs are on the blockchain now

The biggest tech buzzword of 2017 was undeniably “the blockchain,” with startups moving to distributed tamper-proof ledgers, even if they didn’t actually need to. Facebook for cats? Put it on the blockchain. The Uber of ICOs? Blockchainify it (it’s a word, trust me. Or, at least, it will be. Probably).

But it’s not all nonsense. TMT Investments , an AIM-listed venture capital firm with money parked in the likes of Taxify and BackBlaze, just launched the TMT Crypto Fund. This $60 million fund aims to tap the immense amount of wealth and interest in the crypto space, and apply it to rapidly growing blockchain-based startups.

TNW spoke to Igor Shofiot , co-founder of the TNT Crypto Fund. Here’s how he explained it.

You could be forgiven for scratching your head. The VC model is one that’s tried-and-tested, and has been successfully replicated the world over. Why fiddle with something that (by-and-large) works, and has been the rocket fuel behind virtually every Silicon Valley success story?

“This [Crypto Fund] offers a great deal of benefits beyond the classical model, such as more immediate liquidity (usually you have to wait for an exit or IPO for an investment to pay you) and transparency for all parties,” explained Shofiot.

The biggest difference is something that’s often missing from the established VC model: openness.

“Decentralization brings numerous opportunities for disruption, cost-savings, better security, and so on,” Shofiot told us.

TMT Investments is no sketchy, fly-by-night ICO. It’s based in London and San Francisco. The founding partners have built and scaled several major companies. One partner, German Kaplun , built RBC, which is currently one of Russia’s biggest media houses.

The VC firm itself has been around for a while, and has backed some startups you’ve probably already heard of.

Taxify is probably the biggest; the Uber-rival has enjoyed growth in several African cities, and now has its eyes set on London and Paris . Other big names include Le Tote, DepositPhotos, and Amazon S3-rival BackBlaze.

With the TMT Crypto Fund, the company aims to target high-growth startups involved in the nascent blockchain space.

“We will invest in companies that demonstrate a true ability to scale,” Shofiot explained.

Despite issuing tokens, TMT aims to behave much like a VC when it comes to who it lets invest in the fund. “Only qualified US investors in the US, and only people who qualify to invest under the laws of their respective countries can invest in the fund,” explained Shiofot.

So, what makes an investor ‘qualified’? Money . While an ICO isn’t all that discerning on who can invest, to throw some cash into this fund in the US, you have to have a net worth of either $1 million, or have earned at least $200,000 in each of the past two years.

“We want to make sure that the offering is done in a strict compliance to the US and international law, and since one of the partners, Julian, who is a highly reputable attorney that has structured many blockchain transactions, we will make sure that everything is done strictly by law,” said Shofiot

TMT Investments are smart to focus on the blockchain space. There’s a lot of crap, certainly, but it has the capacity to transform banking, finance, insurance, and other key sectors that require transparency and the immutability of records. It’ll be interesting to see how other VCs follow suit.

South Korea to boost local blockchain scene with $9M investment

It seems the South Korean government is intent on encouraging the country’s adoption of blockchain, as it plans to inject more investment into the tech’s development.

The Korea Internet and Security Agency (KISA) has announced it will invest 10 billion won ($9 million) into 12 projects designed to demonstrated the potential of the tech to the public, as spotted by CoinDesk Korea .

With this move, KISA aims to expand the total number of government-backed projects to 18 by 2019. By comparison, KISA backed only six projects in 2018, with a 4.2 billion won ($3.8 million) investment.

The projects in question were selected from 72 proposals that spanned industries such as shipping, agriculture, online voting, real estate, and, of course, the government.

These will aim to both develop working use cases of the technology, but also stimulate interest blockchain technologies among the South Korean public and private markets.

It should be noted that of the six projects currently underway, most of the funding has come directly from the government, with an average of 560 million won ($500,000) invested in each project. According to reports, private investors contributed between 200 and 350 million won ($170,000 – $310,000) of investment cash to the fund.

The South Koreans will likely be keen to grow interest from private investors over the next 12 months if they are to put the country on the blockchain map.

It would certainly appear that the East Asian nation is keen to do so.

This week saw another announcement from the Ministry of Information and Communications which outlined the launch of a specialist blockchain training scheme for 42 carefully selected students, to create the next generation of South Korean blockchain experts.

EOS user exploits ‘dumb’ smart contract to make 1B tokens magically appear

Warning! There is a strong chance this will give readers a sense of déjà vu.

Another EOS decentralized app (dApp) has severely botched an airdrop. This time, fledging gambling platform Se7ens is in the spotlight, after a community member managed to credit himself with a billion tokens by exploiting its poorly made smart contract.

Se7ens, an EOS-powered dice game, announced it would be distributing exactly half of its seven billion token supply to EOS holders. Developers were meant to send 10,000 tokens to each participating account, but instead were forced into sending so much more.

Below, we can see Se7en’s smart contract ‘mistakenly’ credit an EOS account with one billion SEVEN tokens. Shortly after, the tokens mysteriously disappeared.

“After I published [what happened] on Reddit, [SE7EN] silently cut my balance to 100,000 tokens and called it a bug bounty,” the account holder wrote. “I didn’t even receive any transaction in my history, and the tokens have magically disappeared. So, the team assigns themselves a freedom to modify user balances at will. I wonder how they plan to be listed on an exchange with such treatment of their assets.”

Problems arose when the user noticed developers failed to build Se7en’s smart contract correctly. Strangely, they did not use the standard, pre-built EOS functions made specifically for sending tokens – “issue,” and “transfer.”

This meant cryptocurrency suddenly appeared in user accounts, rather than being transferred over the blockchain. There is no trace of the transactions being confirmed by the network.

To make matters worse, devs did not add any checks to ensure the amounts sent by its airdrop were correct. This is the security flaw that allowed the user to instantly credit himself with 100,000 times the intended amount.

This isn’t even the first time EOS dApp developers have screwed up an airdrop.

Truly, small-time cryptocurrency platform Trybe recently drew community ire after it suddenly accessed user accounts to retrieve tokens mistakenly sent by its smart contract-powered airdrop.

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