The Daily: Matter Labs cuts staff as ZKsync demand falls, SEC charges Galois Capital and more

Happy Tuesday! In today’s newsletter, Matter Labs cuts 16% of staff as ZKsync ZK
-3.96%
demand falls, the SEC charges Galois Capital over custody issues, the WazirX hacker moves $6.5 million in ether to Tornado Cash and more.

Let’s get started.

Matter Labs trims workforce by 16% as demand for ZKsync falls

ZKsync developer Matter Labs cut around 16% of its workforce on Tuesday due to changing market conditions and business needs throughout 2024, according to CEO Alex Gluchowski. 

• For much of this year, zkSync Era consistently held the highest seven-day moving average of daily transactions among ZK-powered Ethereum ETH
  -2.75%
  Layer 2 networks.
• However, activity has declined in recent months after the project’s ZK token airdrop in June, slipping behind Linea and Scroll.
• The number of active addresses on ZKsync has also dropped substantially since a peak of more than 455,000 in April to around 93,000 as of Monday, according to The Block’s data dashboard.
• “We went through a large org planning exercise, and it became clear that the talent and roles we have today do not perfectly match our needs,” Gluchowski wrote on X. 
• “We then reviewed every single role in the company to make sure that we have the right roles and people in the right place, to remain agile and effective.”
• Since its founding in 2018, Matter Labs has raised $458 million across four funding rounds, according to Tracxn.

SEC charges and settles with crypto-focused Galois Capital over custody issues

The Securities and Exchange Commission has charged and settled with crypto-focused investment advisory firm Galois Capital over issues related to how it handled client assets.

• The charges were linked to a private fund that primarily invested in cryptocurrency, the SEC said in a statement on Tuesday.
• The SEC accused Galois Capital of violating custody rule provisions, putting investors at risk of asset loss, misuse or misappropriation.
• Galois Capital agreed to settle with the SEC without admitting or denying the allegations and pay a civil penalty of $225,000, to be distributed to the fund’s investors.

WazirX hacker moves $6.5 million in ether to Tornado Cash

The WazirX hacker appeared to transfer 2,600 ETH ($6.5 million) to the sanctioned crypto mixer Tornado Cash on Tuesday to launder the funds, according to security firm PeckShield.

• Using mixers like Tornado Cash is a common tactic cybercriminals use to obscure the origins of stolen crypto, making it difficult to track.
• WazirX reported a cyber attack on July 18, resulting in losses exceeding $230 million from its multi-signature wallet and leading to the freezing of withdrawals with recovery chances limited.
• The North Korean Lazarus Group, notorious for executing high-profile exploits, is believed to be behind the hack.

Web3 security firm Hypernative raises $16 million

Hypernative raised $16 million in Series A funding led by another web3 security firm Quantstamp, with the equity-structured round bringing its total fundraising 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 more than 120 clients, including Uniswap, Solana and Chainlink.
• Hypernative claims to have saved over $100 million in funds and detected 99.5% of hacks with a lower than 0.001% false positive rate since its launch in September 2022.
• The company plans to use the new funding to expand its presence in the Asia Pacific and U.S. markets and grow its current team of 30 employees.

Scottish court seizes bitcoin belonging to ‘brains’ behind machete crypto robbery

A Scottish court seized £110,000 ($144,000) worth of bitcoin from John Ross Rennie, who was convicted as the “technical brains” behind a 2020 assault and crypto robbery, the BBC reported.

• The victim “was forced to transfer cryptocurrency after waking up to find a man standing over him with a machete,” the report said.
• The case is the first in Scotland where police successfully traced and seized stolen cryptocurrency following a robbery, with the funds converted by prosecutors into physical cash.

In the next 24 hours

• U.S. mortgage data are released at 7 a.m. ET on Wednesday. U.S. JOLTs job opening figures follow at 10 a.m.
• Korea Blockchain Week continues in Seoul.

Never miss a beat with The Block’s daily digest of the most influential events happening across the digital asset ecosystem.

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