Weekly News Highlights | Three Arrows Capital has filed for bankruptcy protection; multiple crypto executives from Binance, Opensea, and others have resigned

Organizer: Linqi, Chain Catcher

Important News

1. People's Daily Article: Virtual Currency is Ultimately a Dream and a Ponzi Scheme

On June 27, news reported that Shan Zhiguang, Director of the Informationization and Industrial Development Department of the National Information Center and Chairman of the Blockchain Service Network (BSN) Development Alliance, along with He Yifan, Executive Director of the BSN Development Alliance, published an article in People's Daily on June 26 stating that virtual currency is undoubtedly the largest Ponzi scheme in human history. To maintain this scheme, the crypto world has tried various ways to dress it up in different guises.

The author of the article analyzes the recent Bitcoin crash, the Terra collapse, and the "X2E" incident, arguing that several fundamental characteristics of virtual currency closely align with equity-based Ponzi schemes. Virtual currencies are rife with insider trading, opaque operations, and security vulnerabilities. They are not tied to anything of value, and their price support relies entirely on two decisive factors: the confidence of current participants and the number of new participants.

"Running while making money," a seemingly attractive business model, is actually a fishing strategy employed by project parties, with the hidden trap being that the creation of virtual currencies (especially tokens that do not require mining) is costless. X2E is essentially "airdrop" (referring to providing free cryptocurrencies), with the only difference being that users earn it through simple daily activities, creating the illusion of value because they feel they have put in some labor. The ultimate goal is still to attract users into trading speculation on equity.

Furthermore, the author believes that the immense value of blockchain technology should not be overlooked due to virtual currencies. With proper industrial guidance and clear laws and regulations, they will play a significant role in various application fields such as the digital economy, digital culture, data rights, privacy protection, and computing power networks in the future. The "public information system" based on blockchain as a primary form will revolutionize the design thinking of the entire information system from the ground up, thereby enhancing the capability and quality of information systems in the new era. (People's Daily)

2. Arbitrum Suspends Odyssey Activities Due to Gas Fees Being Nearly 40% Higher than Ethereum Mainnet

On June 30, news reported that Arbitrum announced it would suspend Odyssey activities before the Nitro release due to heavy on-chain load leading to higher than normal gas fees, ensuring that all communities and projects within Arbitrum continue to have the best experience. Users who completed the Odyssey Week 2 tasks can still earn points. Arbitrum stated that once Nitro is launched, it will coordinate with @GMX_IO and @yield to announce when Week 2 will restart.

Previously, L2 Fees data showed that the average gas fee for each transaction on the Arbitrum network is about $5.66, which is $4.05 higher than the Ethereum mainnet gas fee, an increase of 40%. Additionally, the gas fee for sending ETH on the Arbitrum network is about $0.27, also higher than other Layer 2 networks. (Source Link)

3. Bloomberg: Three Arrows Capital Files for Bankruptcy Protection in New York

On July 2, news reported that according to court documents, representatives of Three Arrows Capital filed for Chapter 15 bankruptcy protection in New York on Friday to prevent creditors from seizing the company's assets in the U.S. This move aims to protect its U.S. assets while liquidating in the British Virgin Islands. (Bloomberg)

4. U.S. SEC Rejects Grayscale's Application to Convert GBTC to Bitcoin Spot ETF and Bitwise's Bitcoin ETP Trust Application

On June 30, news reported that according to documents on the U.S. Securities and Exchange Commission (SEC) official website, the agency has rejected Grayscale's application to convert its GBTC to a Bitcoin spot ETF and also rejected Bitwise's Bitcoin ETP Trust application. (Source Link)

5. Insider: Huobi Founder Li Lin is Seeking to Sell His Shares in Huobi
On July 1, news reported that multiple insiders confirmed to Wu that Huobi founder Li Lin is seeking to sell his shares in Huobi. Li Lin currently holds over 50% of Huobi's shares. However, it is difficult to sell at a high valuation in the current downtrend. Other shareholders of Huobi include Sequoia China, ZhenFund, and others. After withdrawing from the Chinese market, Huobi's revenue has sharply decreased, and it is undergoing layoffs. (Wu Talk)

6. Meitu Reports a Net Loss of Over 99% Year-on-Year in the First Half of the Year, Mainly Due to Impairment of Its Crypto Assets

On July 3, news reported that according to Meitu's announcement on the Hong Kong Stock Exchange, it expects to record a net loss of approximately RMB 274.9 million to RMB 349.9 million for the six months ending June 30, an increase of approximately 99.6%-154.1% compared to the same period in 2021, with the main reason for the expected increase in net loss being the impairment of purchased cryptocurrencies. (Jin10)

7. Nayuki Tea Launches "Nayuki Coin" and Virtual Stocks, the Fluctuation of the Latter is Linked to Real Stock Prices

On June 30, news reported that Nayuki Tea announced the launch of its one-year anniversary event on its official WeChat account. Starting from June 30, for every RMB 1 spent, customers can earn 1 Nayuki Coin. Users can use Nayuki Coins to buy/sell virtual stocks and become virtual shareholders, or redeem various gifts in the Nayuki Coin mall. Additionally, every 30 shares of virtual stock can be exchanged for a RMB 3 voucher. Nayuki's virtual stocks are linked to real stock price fluctuations, with virtual stock price = Nayuki's Hong Kong stock closing price * HKD to RMB exchange rate. Virtual stocks can also incorporate leveraged borrowing, allowing users to choose x2, x5, or x10 leverage.

Furthermore, Nayuki has launched the metaverse "Nayuki Paradise," which will go live today at 20:00. Previously, Nayuki Tea had released "NAYUKI" NFT art blind boxes in December last year. (Source Link)

8. Tether CTO Responds to Hedge Fund Shorting Rumors: USDT is a Reliable Stablecoin, Always Redeemed Normally

On June 28, news reported that regarding the rumor that "traditional hedge funds are shorting the stablecoin USDT," Tether's CTO Paolo Ardoino tweeted that from the beginning, this seems to be a coordinated attack, a new wave of FUD and bots. These hedge funds are using USDT/USD perpetual contracts and spot shorting tools to create enough pressure to cause significant capital outflows, harming USDT liquidity, ultimately repurchasing tokens at lower prices. Over the past months/years, these hedge funds have believed in and helped spread various FUD.

Despite public third-party evidence, Tether's cooperation with regulators, and Tether's transparency initiatives, they have always implied that Tether is the bad guy. But as has been said before, Tether has >=100% reserve backing, redemptions have never failed, and all USDT is redeemed at $1. Within 48 hours, Tether processed $7 billion in redemption operations, averaging 10% of its total assets, which is something almost impossible for banking institutions.

In just over a month, Tether processed $16 billion in redemption operations (about 19% of total reserves), once again proving that Tether's operations, portfolio, banking infrastructure, and team are reliable and have been battle-tested. USDT is the only stablecoin proven to have strength under extreme pressure.

Earlier, The Wall Street Journal reported that after the collapse of TerraUSD (UST), more traditional hedge funds executed short trades on the stablecoin Tether (USDT) through crypto brokerage Genesis Global Trading over the past month. Genesis's institutional sales director Leon Marshall stated that the nominal value of these trades is "hundreds of millions of dollars," but he refused to disclose more details. (Source Link)

9. Huobi Responds to Layoffs: No Layoff Ratios or Targets Due to Revenue Decline, Business Adjustments, and Cost Reduction

On June 28, news reported that Huobi responded to the layoff incident, stating that there are no layoff ratios or targets. On one hand, after withdrawing from the mainland Chinese market, there has been increased investment in exploring international markets, which has indeed affected revenue; on the other hand, given the current market downturn, the company also needs to make business adjustments and reduce costs to prepare for "winter."

Earlier, according to Wu Talk Blockchain citing insider reports, Huobi is set to initiate large-scale layoffs, potentially exceeding 30%. The significant revenue drop after withdrawing from Chinese users is the main reason. Additionally, insiders revealed that Huobi's asset management and new investment in the public chain Cube have also encountered some issues, leading to potential adjustments in the current management team. However, some investors have indicated that Huobi has ample cash flow and substantial dividends, suggesting this is a proactive adjustment in a downtrend. (Source Link)

10. Cosmos Development Company Ignite CEO Peng Zhong Announces Resignation
On July 2, news reported that Peng Zhong, CEO of Cosmos development company Ignite (formerly Tendermint), announced his resignation on his personal social media. Additionally, Ignite's official website has been updated, showing that Ignite will primarily focus on blockchain development tools Ignite CLI, while the page regarding its venture capital department and accelerator has disappeared.

Previously, Chain Catcher reported on May 26 that Cosmos development company Ignite announced it would split into Ignite and NewTendermint, with Ignite co-founder Jae Kwon becoming CEO of NewTendermint, and current CEO Peng Zhong continuing as CEO of the restructured Ignite. (Source Link)

11. BlockFi Signs Credit Line and Acquisition Agreement Worth $680 Million with FTX.US

On July 2, news reported that BlockFi CEO Zac Prince announced on Twitter that the company has signed an agreement with FTX.US, under which FTX will provide BlockFi with a $400 million revolving credit line, and FTX has the right to acquire BlockFi at a variable price of up to $240 million. Additionally, the agreement still requires shareholder approval.

Prince stated that including other considerations, the total value of the agreement is as high as $680 million. So far, BlockFi has not drawn on this credit line and continues to operate all products and services normally. (Source Link)

12. Binance Chief Growth Officer Ted Lin Resigns for Personal Reasons

On July 2, news reported that Binance Chief Growth Officer Ted Lin announced on Twitter that he has officially ended his work at Binance. Ted stated that leaving was a difficult decision, but he hopes to have more time with his family and arrange his time more flexibly. He will continue to help advance the Binance ecosystem through angel investments and advisory roles.
LinkedIn profiles show that Ted Lin joined Binance in September 2017, serving as Head of International Markets, Chief Growth Officer, and Investment Advisor. (Source Link)

13. Opensea Co-Founder Alex Atallah Announces Departure at the End of July

On July 2, news reported that Opensea co-founder Alex Atallah announced on Twitter that he will leave at the end of next month and will shift his focus to building something from scratch, but will remain on the board.

Currently, Alex Atallah is primarily responsible for NFT security and OpenSea Ventures ecosystem work at Opensea, with 0age and Kevin Pawlak set to take over. (Source Link)

14. Zhao Changpeng: In Talks to Acquire Over 50 Crypto Companies

On July 2, news reported that Binance CEO Zhao Changpeng stated in an interview that the company currently holds a large cash reserve and is actively seeking to support distressed crypto companies. Zhao emphasized that not all projects are worth saving and that he does not want to rescue poorly managed companies, but hopes to help most companies facing some liquidity tightening through this cycle, currently in talks with over 50 crypto companies for acquisitions. (Source Link)

15. NFT Rental Market Double Protocol Launches Rentable NFT Standard, Becoming the 30th ERC Standard on Ethereum with Status "Final"

On June 29, news reported that the NFT rental market Double Protocol's rentable NFT standard "EIP-4907" has passed the final review by the Ethereum development team, becoming the 30th ERC standard on Ethereum with a status of "Final."

It is reported that this standard achieves the separation of NFT ownership and usage rights through a dual-role setup and introduces an automatic reclaiming of usage rights upon expiration. The application of the "ERC-4907" standard will significantly reduce the development and integration costs of renting Utility NFTs such as games, metaverses, and membership cards, making NFT assets more liquid. Currently, 12 projects have confirmed the application of the "ERC-4907" standard. (Source Link)

16. Quixotic: Suspends Market Activities, NFTs Unaffected, Will Refund Stolen ERC-20 Tokens

On July 1, news reported that Quixotic, the largest NFT platform on Optimism, tweeted that the platform's market contract had a vulnerability that allowed hackers to steal users' ERC-20 tokens, but NFT assets remain secure. Quixotic has decided to immediately suspend the trading market and will refund all stolen ERC-20 tokens to affected users in the coming days.

According to previous reports, the SlowMist security team reported that the largest NFT platform on the Optimism ecosystem, Quixotic, experienced a serious vulnerability, leading to the theft of a large number of user assets and warning users who have traded on the platform to revoke authorizations as soon as possible.

After Quixotic's announcement, SlowMist reiterated that hackers stole approximately 220,000 OP (about $119,000), then exchanged it for USDC and cross-chain to BNB Chain, subsequently converting it to BNB and transferring it to Tornado Cash. (Source Link)

17. Gitcoin Releases Review of 14th Round of Grant Donations, 44,000 Contributors and $4.9 Million in Donations Set New Records

On July 1, news reported that Gitcoin released a review of the 14th round of grant donations (GR14), with all metrics setting new records. This round of donations saw over 44,000 contributors donating to more than 1,250 projects, with a total donation amount of $4.9 million, of which $3.2 million came from a joint matching pool and $1.7 million from the community.

It is reported that the main round of funding for this donation was allocated based on the QF mechanism, with a maximum cap of 2.5% to ensure that matching funds do not overly concentrate on a few grants. Considering the total funding pool size of $1 million, the maximum match for each grant is $25,000. (Source Link)

18. Near Announces Launch of Stablecoin USN v2.0, Pegged 1:1 to Stable Assets at This Stage

On July 1, news reported that Near announced the launch of the stablecoin USN v2.0. The redesigned stablecoin USN has transitioned to a flexible model, supporting major stable assets at a 1:1 ratio and obtaining sustainable local yields from $NEAR staking rewards, with plans to reintroduce non-stablecoin assets as collateral in the future.

USN v2.0 is planned to be executed in two phases: during the bear market phase, $USN will be supported 1:1 with $USDT, and users can only use $USDT to mint and redeem $USN; during the bull market phase, $NEAR will be reintroduced for minting $USN and then staking.

It is understood that due to recent events such as the UST de-pegging, the Near stablecoin design team Decentral Bank has conducted more complex and proactive simulations for USN. Given the uncertainty of the bear market and the selling pressure caused by tightening macro conditions, v1.0 may pose the risk of insufficient dollar collateral due to continuous fluctuations in the dollar NEAR price. Therefore, the team redesigned $USN to adapt as much as possible to the harshest market conditions. (Source Link)

19. Hundreds of Bored Ape NFT Holders Sign Contracts with Boredjobs to Rent NFTs to Brands

On July 1, news reported that hundreds of BAYC NFT holders have signed contracts on a new NFT licensing market "Boredjobs," allowing them to rent their BAYC IP to brands. This market was launched by blockchain accelerator Mouse Belt Labs. (Cointelegraph)

Important Financing/Venture Capital News

1. Biotechnology Company Vibe Bio Completes $12 Million Financing, Governance Token VIBE to Launch This Year

On June 27, news reported that the new biotechnology company Vibe Bio recently announced the completion of $12 million in financing, led by Initialized Capital, with follow-on investments from Naval Ravikant, Balaji Srinivasan, 6th Man Ventures, Yvonne Hao, Enke Bashllari, Andy Coravos, Lerer Hippeau, Andy Palmer, and others. The funds from this round of financing will be used for Vibe DAO, linking patient communities directly with investors, scientists, and other experts to identify and develop treatments for rare diseases.

It is reported that Vibe Bio is headquartered in Boston, USA, and unlike traditional biotech companies, it aims to sustainably scale the development of treatments, providing patient communities with ownership of outcomes and funding its development through the sale of the VIBE token, which will launch later this year. (Source Link)

2. Layer1 Blockchain Linera Completes $6 Million Seed Round Financing, Led by a16z
On June 29, news reported that Layer1 blockchain Linera announced the completion of a $6 million seed round financing, led by a16z, with participation from Cygni Capital, Kima Ventures, and Tribe Capital.

It is reported that Linera's founder and CEO Mathieu Baudet is a former employee of Meta and helped create the Libra blockchain. The Linera blockchain features low latency and linear scalability, consisting of shards or a single thread, adding additional validators to improve network efficiency, allowing most account-based operations to be confirmed in fractions of a second. (Source Link)

3. Web3 Authentication Company Dynamic Completes $7.5 Million Seed Round Financing, Led by a16z
On June 29, news reported that Web3 authentication startup Dynamic completed a $7.5 million seed round financing, led by a16z, with participation from Castle Island Ventures, Solana Ventures, Circle Ventures, Breyer Capital, Hypersphere, and Chapter One.
It is reported that Dynamic primarily provides wallet-based authentication infrastructure, aiming to serve various types of startups and companies in both web2 and web3 spaces. It has launched a closed beta product and is expected to officially launch later this year. (The Block)
4. Crypto Venture Firm OP Crypto Launches $100 Million Fund to Support Early-Stage Crypto VCs

On July 1, news reported that crypto venture firm OP Crypto announced it is raising $100 million for its new "Fund of Funds," deploying capital to emerging VCs focused on early-stage crypto investments.

Currently, the fund has received $50 million in commitments from traditional and crypto-focused LPs, including LedgerPrime and FJ Labs, with a target and hard cap of $100 million. (Techcrunch)

5. Crypto App Store Magic Square Completes $3 Million Seed Round Financing, Co-Led by Binance Labs and Republic

On July 1, news reported that multi-chain crypto app store Magic Square completed a $3 million seed round financing, co-led by Binance Labs and Republic, with participation from KuCoin Labs, GSR, IQ Protocol, Gravity Ventures, Alpha Grep, and other angel investors.

It is reported that Magic Square is a Web3 solution that makes it easier for everyone to use cryptocurrencies. Users can discover and experience various dapps, CeFi and DeFi, NFTs, games, etc., within Magic Square. The public beta will soon be opened to 50,000 pre-registered users. (Source Link)

6. Ethereum Scaling Project AltLayer Completes $7.2 Million Seed Round Financing, Led by Polychain Capital and Jump Crypto

On July 1, news reported that Ethereum scaling project AltLayer completed a $7.2 million seed round financing, led by Polychain Capital, Jump Crypto, and Breyer Capital, with participation from Polkadot founder Gavin Wood, former Coinbase CTO and former a16z partner Balaji Srinivasan, Circle co-founder Sean Neville, and co-founders of Synthetix and Bodhi Ventures Kain Warwick and Jordan Momtazi.

AltLayer was founded by former Zilliqa CTO Yaoqi Jia. Yaoqi Jia stated that AltLayer will focus on dedicated chains for specific applications, and this round of financing was raised through SAFT (Simple Agreement for Future Tokens). (The Block)

7. BKEX LABS Announces Strategic Investment in BovineVerse

On July 3, news reported that BKEX's BKEX LABS announced a strategic investment in BovineVerse to accelerate its application in the metaverse and entertainment industry, with this round valuing at $48 million.

It is reported that BKEX LABS is a well-established investment company with six years of experience in blockchain investment, asset management, and project incubation, headquartered in Singapore, Dubai, and San Francisco.