FT : Lukoil’s ex-chief warns against EU ban on ‘irreplaceable’ Russian oil

Lukoil’s ex-chief warns against EU ban on ‘irreplaceable’ Russian oil
Vagit Alekperov says tightened sanctions would be worst outcome for Europe as well as Moscow

The former head of Russia’s second-biggest oil group has warned that a European ban on the country’s “impossible to replace” crude would be “the most negative scenario” for all parties as EU discussions on an embargo intensify.

Vagit Alekperov, who stepped down as chief executive of Lukoil last month after he was hit by western sanctions, told the Financial Times that any EU move to cut off Russian oil imports would be “a shock for everyone”. 

“By imposing sanctions, western countries gave a clear signal and declared their position. There is no need to further tighten them,” the billionaire said in his first press interview since stepping down.

Alekperov’s comments come amid fierce debate in the EU — which relies on Russia for a quarter of its oil imports — on whether to instigate an oil ban that would ratchet up the pressure on Moscow but exacerbate Europe’s energy crisis.

European Commission president Ursula von der Leyen wants the EU to stand alongside G7 partners including the US, which imposed oil sanctions in March. But a push to include an oil ban in the EU’s sixth package of measures against Russia has run into opposition from Hungary, which says it cannot afford to find alternative fuels.

Alekperov acknowledged that an oil import ban would mean “Russia will have to reduce production, freeze wells, as we did at the beginning of the pandemic in 2020, because it is impossible to redirect all European volumes to other markets overnight”.

But he warned that for the EU, “it is impossible to replace such a major energy exporter as Russia, even in the medium term”.

Building new infrastructure to redirect Russian crude currently flowing to Europe would take years, Alekperov said, particularly in an environment where the global industry had already lost “hundreds of billions, trillions of dollars” of investment in recent crises.

“Military conflicts can end quickly, while the energy configuration of the world has been set by decades of investment and hard work of many generations of professionals,” he added. “There is no need to undermine or destroy it.”

Referring to declining energy security and rising prices in the wake of Russia’s invasion of Ukraine, he said: “This is not a natural process, such as decarbonisation, and not a short-term consumption crisis as in the coronavirus pandemic. This is a very severe energy crisis with negative long-term consequences for all market participants.”

The commission has offered €2bn in loans to Hungary and other central European states to adapt their infrastructure as part of its €210bn RepowerEU plan to attain energy independence from Moscow.

Alekperov was one of the longest-serving oil executives in Russia until UK and Australian sanctions against him prompted him to step down from Lukoil after 30 years at the helm.

Hailing from Azerbaijan, where he worked as an oilman before moving to manage oilfields in Siberia and then to the Soviet oil and gas ministry, Alekperov founded Lukoil by uniting three of the largest Soviet oilfields in 1991. The company was in the top three global oil producers in 1992.

Alekperov saw it through its 1993 privatisation, a London listing and the transition to international reporting standards. The LSE suspended trading in Lukoil shares in March.

He retains an 8.5 per cent stake directly or via family trusts or investment funds. Forbes estimated his wealth in May at $22bn, down from almost $25bn last year.

Like other Russian businesses, Lukoil has been hit by various western measures targeting Russia’s economy. The company warned last month it may need to shut refineries because of its reduced ability to sell oil products abroad or store them domestically.

Alekperov was targeted with sanctions for what the UK government described as benefiting from or continuing to support the Russian government. But he insisted Lukoil and its management had no influence over political decisions or processes.

His decision to step down “was made for the sake of the company, although I won’t hide it, it was a sad one for me”, he said.

“We see that sanctions are often of chaotic, emotional nature,” he said. “They affect people who make no political decisions, have no political influence. Let alone the factual mistakes in them, in last names, titles, or reasons for being sanctioned. It doesn’t look serious from the legal standpoint at the very least and negates the importance of these measures in the eyes of the public.”

FT : ABB and Siemens back Norwegian battery start-up

ABB and Siemens back Norwegian battery start-up
European industrial heavyweights lead €100mn funding round in Morrow Batteries

ABB and Siemens are leading a €100mn fundraising round by Morrow Batteries, a start-up that aims to start producing in its home country of Norway by the end of next year.

Boosting investment in battery production has become an urgent strategic goal for Europe as it races to address the energy crisis and the shortage created by declining Russian gas supplies. 

The region’s biggest battery makers include Sweden’s Northvolt, which raised $2.75bn last year and started production in December, and Norway’s Freyr, which went public last year through a merger with a listed company.

Morrow said it would use its funding to build a 1.2GW pilot factory by the end of next year, which will produce batteries used in energy storage systems such as those used for rooftop solar panels. 

Chief executive Terje Andersen said this initial production would allow the company to obtain certification for producing electric vehicle batteries, which would ultimately become its main market.

“The market is huge,” he said, acknowledging that Morrow was two or three years behind larger rivals such as Northvolt. He estimates Morrow is in the top third of European battery groups. “We are not in the front, and we are not in the back,” said Andersen.

At present China is the world’s biggest battery manufacturer. However, new European trade rules will make it extremely expensive to import batteries from Asia from 2027, creating an opening for Europe’s homegrown battery makers.

Morrow’s €100mn fundraising is being led by Siemens Financial Services, a subsidiary of the German industrial group, and ABB, the Swedish-Swiss power conglomerate. Additional investors include the Norwegian state’s Nysnø Climate Investments and Arendals Fossekompani, a hydropower company and green investment fund.

Morrow previously raised €32mn from investors including Danish pension fund PKA and Agder Energi Venture, which both participated in the second round.

At present Morrow’s battery development line is in South Korea, and the company said it would relocate the production to the new factory in Arendal on Norway’s southern coast.

Global shortages of cobalt and nickel are threatening to push up the price of electric vehicle batteries, prompting some manufacturers to invest in technologies that use less of these materials.

Andersen said the company was planning a battery that had no cobalt and used significantly less nickel. “We will replace nickel and cobalt with manganese. This is what the EV producers are keen to discuss with us.”

FT : Saudi Arabia signals commitment to Russia as Opec+ partner

Saudi Arabia signals commitment to Russia as Opec+ partner
Oil alliance’s production quotas set to expire in three months and Russian output is falling

Saudi Arabia has signalled it will stand by Russia as a member of the Opec+ group of oil producers despite tightening western sanctions on Moscow and a potential EU ban on Russian oil imports.

Prince Abdulaziz bin Salman, the energy minister, told the Financial Times that Riyadh was hoping “to work out an agreement with Opec+ . . . which includes Russia”, insisting the “world should appreciate the value” of the alliance of producers.

His comments are an important sign of support for Russia from a traditional US ally as the west tries to isolate the country and its oil production falls, raising questions about its place in the Opec+ group.

As energy consumers grapple with oil prices that are at their highest levels in a decade, a set of Opec+ production quotas put in place in April 2020 is set to expire in three months.

Riyadh has been resisting western pressure to raise crude output to help bring down prices in the wake of Russia’s invasion of Ukraine, insisting there is not a lack of supply.

Prince Abdulaziz said it was too early to say what a new agreement might look like given the uncertainties in the market, but added that Opec+ would increase production “if the demand is there”.

“With the havoc you see now it’s too premature to try to pinpoint [an agreement],” Prince Abdulaziz said in an interview. “But what we know is what we have succeeded to deliver is sufficient for people to say so far there is a merit, there is a value of being there, working together.”

Opec+ has stuck to its 2020 agreement, under which the alliance members raise total production each month by the modest amount of 430,000 barrels a day.

But Russia’s output has dropped since the start of the Ukraine war, falling from about 11mn b/d in March to an average of 10mn b/d in April, according to data provider OilX.

The International Energy Agency predicts it could fall further, declining by as much as 3mn b/d if western powers impose tougher sanctions to reduce Europe’s dependence on Russian energy, including a possible EU ban on oil imports. India, however, has increased Russian oil imports since the war began. 

Brent crude, the international benchmark, was trading at about $112 a barrel last week.

Saudi Arabia, the de facto leader of Opec and the world’s top oil exporter, has co-ordinated oil production quotas with Russia, since 2016, through Opec+.

The kingdom has sought to navigate a neutral path since Russia invaded Ukraine. Crown Prince Mohammed bin Salman has spoken twice to Putin since the invasion and this month he and King Salman congratulated the Russian leader on the day the country marks the Soviet victory over Nazi Germany.

Prince Abdulaziz blamed soaring prices at petrol pumps on a lack of global refining capacity and taxes.

“The determinant of the market is refinery capacity, and how do you unlock it,” he said. “At least for the last three years, the whole world lost around 4mn barrels of refining capacity, 2.7mn of them just from the beginning of Covid.”

Some members of Opec+ have also consistently failed to meet their production quotas, and Saudi Arabia and the United Arab Emirates are the only producers who have the capacity to significantly increase output.

After Russia launched its invasion in February, the west initially avoided imposing sanctions on Russian energy assets because of Europe’s heavy dependence on the country’s gas and oil exports.

The US and UK banned oil imports from Russia in March. But EU states remain divided on measures to phase out Russian oil supplies, and this month dropped a proposal to ban the EU shipping industry from carrying Russian crude.

Prince Abdulaziz said politics should be kept out of Opec+, adding the alliance would be needed to bring about “orderly adjustments” in the future amid uncertainty about coronavirus lockdowns in China, global growth and supply chains.

He said that to ease bottlenecks in production and refinery capacity governments had to encourage the industry to invest in hydrocarbons even as nations switch to cleaner energy sources.

“This situation needs people to sit together, focus, take out the masquerade and the so-called political correctness . . . it’s about trying to relate to existing reality and find remedies to it.”

FT : ‘Millions’ at risk of death as Ukraine war hits food supplies, Egypt warns

‘Millions’ at risk of death as Ukraine war hits food supplies, Egypt warns
Finance minister Mohamed Maait echoes UN warning that crisis could last for years

Egypt’s finance minister has warned that “millions” could die because of the food price crisis triggered by the Ukraine war, echoing warnings made by the UN and G7 countries as worries about a global wheat shortage intensify.

In an interview during a visit to London, Mohamed Maait warned of “food insecurity” around the world. However, he insisted Egypt had enough wheat to last until the end of the year.

“This is something that we have to be very careful about,” said Maait. “We will feel shame if we find that millions of people are dying because of food insecurity. They are not responsible for that, they didn’t do anything wrong.”

His comments come days after UN secretary-general António Guterres warned the Ukraine conflict risked plunging “tens of millions” into famine.

“Global hunger levels are at a new high,” said Guterres. The war in Ukraine, climate change and the Covid-19 pandemic were also all contributing to a crisis that could last for years, he warned.

G7 countries last week launched a “Global Alliance for Food Security” with the World Bank, to co-ordinate a short-term response. The group aims to increase supplies of food, fertiliser and fuel and to provide financial support to help vulnerable countries avert famine.

Egypt is the world’s biggest wheat importer and runs a large-scale subsidised bread programme that serves almost 70mn people. Until the war it sourced most of its wheat from Russia and Ukraine.

Mostafa Madbouly, the prime minister, said this month that the country had wheat reserves for four months. In addition, the government aims to buy 6mn tonnes of locally grown wheat. But it is seeking new import sources, including potentially Pakistan and Mexico.

Maait also told the FT he was confident Egypt would not fall into recession this year. “The issue of going to recession, I’m ruling [it] out,” he said. “Egypt was one of the few countries able to grow positively over the two years of Covid-19.”

The government is predicting 5.5 per cent growth in the fiscal year that starts in July.

The minister was optimistic that a new three-year funding package, requested by Cairo in March, would be agreed with the IMF. Discussions with the fund were “going very well”, he said. No figure had yet been suggested by the government or by the IMF, he added.

The government has signalled its intention to sell off state assets including some military companies to raise revenue.

Egypt has been left in a precarious position as a result of increasing inflation internationally, which has raised the cost of government borrowing. Domestic inflation has risen from 5 per cent before the war to about 14.5 per cent now.

Maait said the government was still planning to “rationalise” bread subsidies, which cost more than $3bn annually — a prospect raised before the outbreak of the Ukraine conflict but which has been delayed.

“So as long as the cost of bread and the cost of producing bread increases, so the cost of subsidy on the budget increases . . . It cannot go like that,” he said. Altering bread subsidies was “not an imminent action”, but “the intention to move is there . . . over a gradual basis”. 

Maait said Cairo also planned to reform the cash credits received by millions of Egyptians for food, streamlining the list of those eligible to ensure only the needy received them.

Egypt is hosting the UN COP27 climate summit this year and Maait said the country would be issuing new national climate targets, and a new green funding plan, in the the coming weeks.

FT : London Lawfare: how lawyers helped Russia’s super-rich

London Lawfare: how lawyers helped Russia’s super-rich
Since the invasion of Ukraine, work done by firms such as CMS, Harbottle & Lewis and Carter-Ruck for Russian billionaires has come under increasing scrutiny

For Russian oligarchs seeking to silence opponents, the English legal system has been likened to “the biggest, hardest bat you can pick up and swing”.

For top London lawyers and their firms, cases brought by Russian billionaires, often dealing with issues such as alleged libel or data protection, have translated into fat profits.

But the equation has changed in the wake of Vladimir Putin’s invasion of Ukraine.

The imposition of sanctions on dozens of wealthy Russians by the UK has made it far more difficult for them to pursue legal actions in British courts or to use UK law firms, which now require a special government licence to represent such clients.

In recent months, there has also been a government shift away from welcoming court action by oligarchs to denouncing “Lawfare” — the abuse of legal proceedings to grind down opponents.

Since the war started, the work done by firms such as CMS, Harbottle & Lewis and Carter-Ruck for Russian billionaires has come under increasing scrutiny by legislators, both in the US and the UK. And the firms themselves are becoming more circumspect about taking on new clients, in some cases closing down business with Russia.

Bill Browder, a leading investor in Russia turned Kremlin critic, has been fierce and consistent in his comments on past legal actions in London that he says amounted to undue pressure by the Russian state — a view the UK government itself now endorses.

“For the oligarchs and the super-rich who can afford these sky-high costs, the threat of legal action has become a new kind of Lawfare,” British prime minister Boris Johnson declared in March. “We must put a stop to its chilling effect.”

Johnson’s words marked a dramatic contrast with comments he made in 2012, when he wooed Russia’s super-rich, saying: “If one oligarch feels defamed by another oligarch — it is London’s lawyers who apply the necessary balm to the ego.” 

Silencing Kremlin critics
Over the past decade, London has drawn in wealthy Russians and Kremlin allies to launch legal action against critics of Vladimir Putin — notably Browder, once the biggest foreign investor in Russia. In 2013, he was sued for libel by Pavel Karpov, a former Russian policeman, represented by the law firm Olswang, now part of CMS.

Browder had fallen foul of Moscow after his auditor, Sergei Magnitsky, exposed a massive tax fraud by Russian officials — only to be arrested and die in a Russian jail in 2009.

Karpov claimed that Browder’s website suggested he was complicit in the “torture and death” of Magnitsky, but Mr Justice Peregrine Simon threw out the lawsuit in 2013 after ruling that Karpov did not have a reputation in Britain to defend.

Browder depicted the legal action as part of a broader push by the Kremlin to discredit him and human rights legislation passed in Magnitsky’s name in the US and eventually many other jurisdictions. “I have no doubt this was a Russian intelligence operation to attack me and the Magnitsky act,” he said.

In 2017, Browder faced a second civil lawsuit in London, with CMS acting for Nogotkov Kirill Olegovich, a Russian liquidator who sued him over the insolvency of a Russian company once associated with him.

Browder’s lawyers claimed that this was “part of a concerted retaliatory campaign by the Russian state”. Sir Geoffrey Vos threw out the case saying it was “inexcusable” that the liquidator had failed to “alert the court to . . . the political background”.

Another Kremlin critic, former British spy Christopher Steele, was sued in the High Court in 2020 by Russian billionaire Mikhail Fridman and his associates Petr Aven and German Khan.

The case centred around allegations about the men in a 2016 dossier that detailed Donald Trump’s purported ties to Russia and was produced by Steele’s company, Orbis Business Intelligence.

Again, CMS had a central role in the proceedings. The three men, who were advised by Geraldine Proudler of CMS and barrister Hugh Tomlinson QC, won the case after the High Court found that the dossier contained inaccurate personal data.

Silencing journalists
Russia’s billionaires have also sought to use Britain’s libel, privacy and data protection laws to prevent journalists from shedding light on their activities. Critics say their claims often amount to what are termed “strategic lawsuits against public participation” or SLAPPs — attempts to intimidate critics through expensive litigation.

A flurry of lawsuits followed last year’s publication of Putin’s People, an investigation by former Financial Times journalist Catherine Belton of the Russian president’s regime and rise to power.

Fridman and Aven turned to CMS, which launched a libel and data protection claim against the book’s publisher HarperCollins. Roman Abramovich, the billionaire who would also be hit with sanctions this year, lodged a libel lawsuit of his own against the publisher and Belton, hiring Tomlinson and Harbottle & Lewis.

Russian state oil company Rosneft, represented by law firm Carter-Ruck, brought a separate libel lawsuit against Belton and HarperCollins. Belton told a parliamentary committee in March that there had been a “lengthy stand-off” with Carter-Ruck over mentions of Gennady Timchenko, a Putin ally now placed under sanctions, that delayed the book’s publication by six months.

All the claims have now been settled or withdrawn.

Jessica Ni Mhainin, at the Index on Censorship, which campaigns for freedom of speech, says cases like Belton’s are “the tip of the iceberg”, with many lawsuits not making it to court.

Mhainin said the threat of endless litigation and huge legal costs can be used by the super-rich to press campaigners, academics or journalists, who can face financial ruin if they defend a libel case.

Settling scores
Billionaire oligarchs have also used London’s top law firms to settle scores with each other in the capital’s High Court.

In 2011, the late Boris Berezovsky, represented by Addleshaw Goddard — which says it has never acted for any other Russian oligarch — unsuccessfully sued Roman Abramovich, represented by law firm Skadden Arps, in a $6.5bn High Court trial that shone an unflattering spotlight on Russia’s “wild east” capitalism in the 1990s.

Berezovsky alleged that Abramovich had intimidated him into selling shares in oil and gas companies at below their true worth. Abramovich denied the claims and testified that he paid $2.3bn to Berezovsky as political protection money.

Oleg Deripaska, the Russian metals tycoon placed under sanctions by the UK in March, has also been active in London’s High Court. In 2018, Rusal, then controlled by Deripaska, was embroiled in a court battle with billionaire Vladimir Potanin, who is not under sanctions by the UK or US, as part of a struggle for control of Norilsk Nickel, a nickel and palladium producer.

Rusal sought to block Abramovich from selling his stake in Norilsk to Potanin’s company.

New order?
Some legislators have singled out lawyers and firms they say have helped Kremlin allies. UK Conservative MP Bob Seely used parliamentary privilege in March to name specialist media law firms Harbottle & Lewis, Carter-Ruck and CMS, as well as Tomlinson, the prominent barrister.

Last month, US senator Steve Cohen urged the Biden administration to place US travel bans on senior British lawyers he claimed were “foreign enablers of Russian oligarchs”. Among others, Cohen named Tomlinson, Nigel Tait of Carter Ruck, John Kelly of Harbottle & Lewis and Proudler, head of CMS’s Reputation and Media Litigation practice.

Since the Ukraine war began, Proudler has resigned from the Scott Trust, which adjudicates editorial complaints at The Guardian newspaper, the board of The Guardian Foundation, the media group’s charitable arm, and as chair of the board of governors of Middlesex university.

Many in the legal profession argue that they have been unfairly criticised, pointing out that lawyers are heavily regulated and that the courts have safeguards against unmeritorious lawsuits.

“We cannot have a situation where lawyers are reluctant to give advice to individuals, whether or not they have done anything wrong,” said Jonathan Fisher QC, barrister at Red Lion Chambers.

CMS says it has determined that its media litigation process was compliant with all professional regulations as well as its wider responsibilities at the time, adding: “We strongly reject the recent allegations of impropriety that have been made against CMS and in particular Geraldine Proudler.”

Tomlinson has said he had always acted properly in accordance with the rules and “never acted as Mr Cohen suggests”, while Harbottle & Lewis has said it acted in accordance with its legal obligations.

Carter-Ruck said it has acted for very few Russian clients over the years, and does not act for any entity linked to Putin’s regime. It said it was false to suggest that, by defending clients’ countervailing rights, it set out improperly to censor the media or intimidate journalists.

Nevertheless, the backdrop is changing. CMS, for example, no longer accepts instructions from Russia-based entities.

“This was a trend that was already happening even before the Russian invasion because of changes in society,” said Tony Williams, a former managing partner of Clifford Chance, who added that large firms’ profits were much more reliant on areas such as real estate and M&A than on Russian litigation.

“Law firms were already dealing with the ESG [environmental, social and governance] agenda and the issue of reputation management as they think more about the sort of clients and the type of work that they do.”

Meanwhile, Dominic Raab, Britain’s deputy prime minister and justice secretary, has launched a consultation on reform of the country’s libel law, often criticised as being so plaintiff-friendly that it inhibits free speech. It closed on May 19.

The Solicitors Regulation Authority, which governs the profession’s conduct, has already updated guidance to law firms, warning in March against pursuing litigation for improper purposes and making allegations without merit — which it says “might arise because of a conflict with the solicitor’s own interest in generating fee income”.

Trevor Clark, lecturer in the legal profession at Leeds university, emphasises that while lawyers should act in the interests of their clients, they “also have a duty under their professional code to act with integrity and not take advantage of third parties”. 

One example he gives is if there is “an inequality of resources” — such as cases which pit oligarchs against people for whom legal action may mean ruin.

CB : U.S. Venture Rounds Of $100M-Plus Are Trending Lower

U.S. Venture Rounds Of $100M-Plus Are Trending Lower

Venture rounds of $100 million and up are still closing at a steady clip. However, deal counts and funding totals have been trending lower over the course of this year.
Those are the broad findings from a Crunchbase analysis of big U.S. venture rounds this year and last.

Overall, the number of $100 million-plus deals and total capital put into them peaked in November. This month, meanwhile, is on track to be the smallest for both deals and overall investment.
For perspective, we chart monthly deal count and investment totals from January, 2021 through May 2022 below:
What to make of the trendlines? Depending on one’s perspective, it could look either worrisome or reassuring. On the worrisome side, we are clearly below peak. And in markets, that which goes a little bit down often over time goes down a lot.
On the reassuring side, meanwhile, this isn’t a precipitous decline yet. Big rounds are still getting done at a steady clip.

CB : The Week’s 10 Biggest Funding Rounds: Velocity Global Looks To Grow Fast, S

The Week’s 10 Biggest Funding Rounds: Velocity Global Looks To Grow Fast, SpotOn Hits The Mark For Investors

This is a weekly feature that runs down the week’s top 10 funding rounds in the U.S. Check out last week’s biggest funding rounds here.

Even as more signs mount to a funding shortfall for startups, large rounds are still out there to be had from investors. This week saw three rounds announced in the U.S. at more than a quarter-billion dollars. Biotech and fintech both still seem to strike a chord with VCs even as the market softens.

1. Velocity Global, $400M, HR tech: Although layoff talk continues to dominate news headlines, investors are still pouring money into HR tech. This week Denver-based Velocity Global, which helps alleviate the burden of hiring remote and international workers, closed a $400 million Series B led by investment firms Norwest Venture Partners and Eldridge. The company, which expects to hit an annual net revenue run rate of $200 million by midyear, did not release an exact valuation, but did say it increased sevenfold from the same time last year. Founded in 2014, the company has now raised a total of $500 million, according to Crunchbase.

2. SpotOn, $300M, fintech: Eight months ago, San Francisco-based payment company SpotOn closed a $300 million round at a valuation of more than $3 billion. It must have enjoyed it so much the company did the exact same thing again this week. SpotOn closed a $300 Series F round led by Dragoneer at a $3.6 billion valuation—up from $3.15 billion eight months ago. Raising cash in short timeframes is not new for SpotOn, as the company has now closed six rounds in fewer than three years. That may be a tough pace to keep up in the current market conditions. Founded in 2017, Crunchbase data shows that the company has raised nearly $930 million.

3. Kriya Therapeutics, $270M, biotech: Gene therapy developer Kriya Therapeutics locked up a $270 million Series C led by Patient Square Capital. The company—headquartered in Redwood City, California, and Research Triangle Park, North Carolina—develops therapeutics for divisions in ophthalmology, oncology, rare disease and chronic disease using its own proprietary computational engine. The firm will use the new cash to scale that engine, as well as its engineering and manufacturing. Founded in 2019, the company has raised more than $450 million, Crunchbase data shows.

4. Pathlock, $200M, enterprise software: Now more than ever companies need a full view of what applications employees are using and why to make sure critical business assets are not at risk. The job is so big, enterprise software developer Pathlock didn’t just raise $200 million this week, it also merged with two other companies and bought two others. That’s a pretty full week. New York-based Pathlock, which offers access governance solutions, merged with both security providers Appsian and Security Weaver. Additionally, it acquired both Belgium-based CSI Tools and Germany-based Sast Solutions. The new round—led by Vertica Capital Partners—brings the company’s total funding to $200 million, according to Crunchbase.

5. Caribou Biosciences, $115M, biotech: Berkeley, California-based Caribou Biosciences, a genome editing biotechnology company, raised a $115 million Series C co-led by Farallon Capital Management, PFM Health Sciences and Ridgeback Capital Investments. The infusion of cash will be used to further develop the company’s proprietary CRISPR platform for genome editing and has fueled a pipeline of allogeneic cell therapies for oncology. Founded in 2011, Crunchbase data shows that the company has raised nearly $170 million.

6. GreyOrange, $110M, robotics: Atlanta-based GreyOrange, a warehouse robotics firm, closed a $110 million financing from Mithril Capital Management, funds and accounts under management by BlackRock, and others. Founded in 2011, Crunchbase numbers show the company has raised more than $293 million.

7. (tied) Glean, $100M, enterprise software: Palo Alto, California-based work assistant Glean raised a $100 million Series C led by Sequoia Capital at a valuation of $1 billion. Glean previously raised $55 million, according to Crunchbase data.

7. (tied) Imply, $100M, big data: Burlingame, California-based multicloud data platform Imply closed a $100 million Series D led by Thoma Bravo which values the company at $1.1 billion. The company has now raised $215 million to date.

9. Unit, $100M, fintech: New York-based Unit, a banking-as-a-service platform developer, raised $100 million in a Series C led by Insight Partners at a $1.2 billion valuation. Unit has now raised a total of $169.6 million, according to the company.

10. Vestaron, $82M, agtech: North Carolina-based Vestaron, which develops peptide-based insecticides, closed an $82 million Series C led by Ordway Selections and Cavallo Ventures. Founded in 2005, the company has raised more than $250 million, according to Crunchbase.

WSJ : Crypto Might Have an Insider Trading Problem

Crypto Might Have an Insider Trading Problem
Anonymous wallets buy up tokens right before they are listed and sell shortly afterward

Public data suggests that several anonymous crypto investors profited from inside knowledge of when tokens would be listed on exchanges.

Over six days last August, one crypto wallet amassed a stake of $360,000 worth of Gnosis coins, a token tied to an effort to build blockchain-based prediction markets. On the seventh day, Binance—the world’s largest cryptocurrency exchange by volume—said in a blog post that it would list Gnosis, allowing it to be traded among its users.

Token listings add both liquidity and a stamp of legitimacy to the token, and often provide a boost to a token’s trading price. The price of Gnosis rose sharply, from around $300 to $410 within an hour. The value of Gnosis traded that day surged to more than seven times its seven-day average.

Four minutes after Binance’s announcement, the wallet began selling down its stake, liquidating it entirely in just over four hours for slightly more than $500,000—netting a profit of about $140,000 and a return of roughly 40%, according to an analysis performed by Argus Inc., a firm that offers companies software to manage employee trading. The same wallet demonstrated similar patterns of buying tokens before their listings and selling quickly after with at least three other tokens.

The crypto ecosystem is increasingly grappling with headaches that the world of traditional finance tackled decades ago. The collapse of a so-called stablecoin from its dollar peg earlier this month stemmed from crypto’s version of a bank run. How cryptocurrency exchanges prevent market-sensitive information from leaking has also become a growing topic of concern. The focus comes as regulators are raising questions about the market’s fairness for retail users, many of whom just booked major losses on steep declines in crypto assets.

The wallet buying Gnosis was among 46 that Argus found that purchased a combined $17.3 million worth of tokens that were listed shortly after on Coinbase, COIN -1.88% Binance and FTX. The wallets’ owners can’t be determined through the public blockchain.

Profits from sales of the tokens that were visible on the blockchain totaled more than $1.7 million. The true profits from the trades is likely significantly higher, however, as several chunks of the stakes were moved from the wallets into exchanges rather than traded directly for stablecoins or other currencies, Argus said.

Argus focused only on wallets that exhibited repeated patterns of buying tokens in the run-up to a listing announcement and selling soon after. The analysis flagged trading activity from February 2021 through April of this year. The data was reviewed by The Wall Street Journal.

Coinbase, Binance and FTX each said they had compliance policies prohibiting employees from trading on privileged information. The latter two said they reviewed the analysis and determined that the trading activity in Argus’s report didn’t violate their policies. Binance’s spokesperson also said none of the wallet addresses were linked to its employees.

Coinbase said it conducts similar analyses as part of its attempts to ensure fairness. Coinbase executives have posted a series of blogs touching on the issue of front running.

“There is always the possibility that someone inside Coinbase could, wittingly or unwittingly, leak information to outsiders engaging in illegal activity,” Coinbase Chief Executive Brian Armstrong wrote last month. The exchange, he said, investigates employees that appear linked to front running and terminates them if they are found to have aided such trades.

Paul Grewal, Coinbase’s chief legal officer, followed up with a blog post Thursday. The company has seen information about listings leak before announcements through traders detecting digital evidence of exchanges testing a token before a public announcement, he said. Coinbase has taken steps to mitigate that in addition to its efforts to prevent employee insider trading, he said.

Wallets like these have caused debate in the crypto community over whether targeted buying of specific tokens ahead of listings on exchanges points to insider trading. The crypto markets are largely unregulated. In recent years, regulators have looked more closely at the market’s fairness for individual investors. The largest cryptocurrency bitcoin has fallen 24% in May, causing steep losses for individual investors across the market.

Insider trading laws bar investors from trading stocks or commodities on material nonpublic information, such as knowledge of a coming listing or merger offer.

Some lawyers say that existing criminal statutes and other regulations could be used to go after those trading cryptocurrencies with private information. But others in the cryptocurrency industry say a lack of case precedent specific to crypto insider trading has created uncertainty over whether and how regulators might seek to tackle it in the future.

Argus CEO Owen Rapaport said that internal compliance policies in crypto can be undercut by a lack of clear regulatory guidelines, the libertarian ethos of many who work in the space and the lack of institutionalized norms against insider trading in crypto compared with those in traditional finance.

“Firms have real challenges with making sure the code of ethics against insider trading—which almost every firm has—is actually followed rather than being an inert piece of paper,” Mr. Rapaport said.

Securities and Exchange Commission Chairman Gary Gensler said Monday that he saw similarities between the influx of individual investors into crypto markets and the stock boom of the 1920s that presaged the Great Depression, which led to the creation of the SEC and its mandate to protect investors.“The retail public had gotten deeply into the markets in the 1920s and we saw how that came out,” Mr. Gensler said. “Don’t let somebody say ‘Well, we don’t need to protect against fraud and manipulation.’ That’s where you lose trust in markets.”

Spokespeople for the exchanges said that they have policies to ensure that their employees can’t trade off of sensitive information.

A Binance spokeswoman said that employees have a 90-day hold on any investments they make and that leaders in the company are mandated to report any trading activity on a quarterly basis.

“There is a longstanding process in place, including internal systems, that our security team follows to investigate and hold those accountable that have engaged in this type of behavior, immediate termination being minimal repercussion,” she said.

FTX CEO Sam Bankman-Fried said in an email that the company explicitly bans employees from trading on or sharing information related to coming token listings and has a policy in place to prevent that. The trading highlighted in Argus’s analysis didn’t result from any substantive violations of company policy, Mr. Bankman-Fried said.