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MegaETH developer raises $10 million in minutes, US crypto tax evader sentenced to two years and more

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From theblock by James Hunt

Quick Take

  • MegaLabs, the developer of MegaETH, raised $10 million in under three minutes on Echo, marking the platform’s largest sale to date with 3,200 investors from 94 countries.
  • Frank Richard Ahlgren III from Austin, Texas, was sentenced to two years in prison on Thursday for falsely underreporting capital gains made from selling $3.7 million worth of bitcoin.
  • Crypto exchange Gate.io dismissed rumors of a security breach on Friday morning, confirming no abnormalities or issues were detected.
  • The following article is adapted from The Block’s newsletter, The Daily, which comes out on weekday afternoons.

MegaETH developer raises $10 million in 3 minutes on Cobie's Echo

MegaLabs, the developer of MegaETH, raised $10 million in under three minutes on Echo, marking the platform's largest sale to date with 3,200 investors from 94 countries.

  • Echo is an angel investor platform founded by popular crypto trader Jordan Fish, better known as Cobie.
  • The funding round was structured as equity plus token warrants at a "9-figure" valuation, consistent with MegaLabs' $20 million seed round in June, co-founder Shuyao Kong told The Block.
  • MegaLabs hit its initial $4.2 million target in just 56 seconds, with the project deciding to raise an additional $5.8 million due to high investor demand, which it did in just 70 seconds, Kong said.
  • "Crypto has long been plagued by high insider supply and limited community involvement," Kong added. "We are essentially following Ethereum's footsteps by prioritizing community ownership."
  • The funds will be used to support community growth and ecosystem projects as MegaLabs prepares to launch MegaETH's public testnet and mainnet, a "real-time" blockchain with full Ethereum compatibility.

US crypto tax evader sentenced to two years

Frank Richard Ahlgren III from Austin, Texas, was sentenced to two years in prison on Thursday for falsely underreporting capital gains made from selling $3.7 million worth of bitcoin.

  • The U.S. Department of Justice noted that Ahlgren was an early investor in bitcoin, purchasing it as far back as 2011.
  • He used the crypto exchange Coinbase to purchase 1,366  BTC +0.96% in 2015. He sold 640 BTC in October 2017 and used the proceeds to buy a house in Park City, Utah, according to court documents.
  • Ahlgren concealed bitcoin sales made between 2017 and 2019, not reported on his tax returns, using multiple wallets, blockchain mixers and in-person cash exchanges, the DOJ said.
  • He also misled his accountant by inflating the purchase price of his bitcoin to reduce the tax liability on his 2017 federal return.
  • The case marks the first-ever criminal tax evasion prosecution focused solely on cryptocurrency in the U.S., the IRS noted.

Crypto exchange Gate.io dismissed rumors of a security breach on Friday morning, confirming no abnormalities or issues were detected.

  • Social media posts on X and messages in Telegram group chats spread the rumors, urging users to withdraw funds "if you still can."
  • However, the exchange quickly moved to reassure users that deposits, withdrawals and trading operations were still functioning normally.
  • Despite the rumors, the total amount of assets on the platform remained mostly unchanged during the drama, according to data from DefiLlama.
  • In a follow-up statement, Gate.io strongly condemned the spread of false information and creating panic, warning it reserved the right to pursue legal action against those responsible.

Polygon weighs up a $1 billion stablecoin yield proposal

The Polygon community is considering a proposal to deploy over $1 billion in stablecoin reserves on its PoS Chain bridge with Ethereum for yield generation.

  • The proposal, created by Allez Labs in collaboration with Morpho and Yearn, seeks community input on using the idle reserves, which currently represent an opportunity cost of around $70 million annually, they claimed.
  • If implemented, stablecoins like DAI, USDC and USDT would be deployed in appropriate ERC-4626 vaults, with risk management overseen by Allez Labs.
  • The proposal will now be discussed via community forums and reviewed by Polygon's Protocol Governance Council.

Riot Platforms increases its bitcoin holdings by over 5,000 BTC

Bitcoin miner Riot Platforms acquired another 5,117 BTC for over $510 million between Dec. 10 and Dec. 12, raising its total holdings to 16,728 BTC, worth around $1.7 billion.

  • The purchases, made at an average price of approximately $99,669 per bitcoin, were funded using its recent convertible senior note offering and existing cash reserves, the firm said.
  • Despite a $154.4 million net loss in Q3, Riot continues to invest heavily in bitcoin while lowering its 2025 hash rate target to 46.7 EH/s.

Looking ahead to next week

  • UK and Eurozone CPI inflation data are released on Wednesday. The U.S. Federal Reserve's latest interest rate decision is due the same day. The UK's interest rate decision, U.S. jobless claims and U.S. GDP figures follow on Thursday. U.S. PCE numbers are out on Friday.
  • ECB President Christine Lagarde speaks on Monday. The FOMC press conference is set for Wednesday.
  • Taipei Blockchain Week concludes in Taiwan.
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