Weekly News Highlights | Babel Finance loses over $280 million in proprietary trading; Voyager rejects Alameda's acquisition proposal

Organizer: Linqi, Chain Catcher

Important News

1. Babel Finance loses over $280 million in proprietary trading and seeks to convert hundreds of millions in debt to equity

On July 29, according to restructuring proposal documents obtained by The Block, cryptocurrency lender Babel Finance suffered significant losses due to proprietary trading with customer funds, losing 8,000 BTC and 56,000 ETH in June, worth over $280 million. Due to these massive losses, Babel's lending and trading departments were unable to meet margin calls from counterparties. According to recordings, stablecoin issuer Tether has extended Babel's margin call notification deadline to one month.

Currently, Babel Finance is seeking to convert hundreds of millions in debt to equity and raise more funds through revolving credit financing. Initially, it aims to convert $150 million of the largest creditor's debt into convertible bonds, in addition to raising $250 million to $300 million through convertible bonds, and then obtaining $200 million in revolving credit from creditors to restore operations. If successful, this plan will turn Babel's largest creditors into shareholders. (The Block)

2. Vitalik: Ethereum mainnet merge upgrade will not immediately complete PoS transition, so it will not quickly affect prices
On July 28, Vitalik Buterin stated in an interview that, from both a market perspective and a psychological and narrative perspective, it is unlikely that Ethereum's price will rise quickly before or after the merge. The merge is most likely to occur on September 19, but the PoS transition will not be completed immediately with the merge of the Ethereum mainnet and the beacon chain.

Ideally, the upgrades Surge, Verge, Purge, and Splurge are crucial to the "merge." It is expected that there will be a waiting period of 6 to 8 months before actual price fluctuations occur under "appropriate conditions." After the merge, Ethereum will experience deflation.

Previously, Vitalik stated that the Merge, Surge, Verge, Purge, and Splurge are not different phases but will occur in parallel. Ethereum has successfully completed its tenth shadow fork, and the Ethereum testnet Goerli/Prater merge will begin in two phases on August 4. (Source Link)

3. Yuga Labs faces class action lawsuit for false advertising, may confirm whether NFTs are securities

On July 25, according to Decrypt, Scott+Scott law firm is currently organizing a class action lawsuit against Yuga Labs. The lawsuit will accuse Yuga of falsely promoting Bored Ape NFTs and ApeCoin as securities with guaranteed returns, while the value of these tokens has plummeted over the past three months.

The plaintiffs have not yet filed a formal complaint in federal court. Scott+Scott is still looking for plaintiffs who suffered losses from purchasing Yuga-supported NFTs and tokens between April and June, and the firm has not immediately responded to requests for comments on the matter.

The key issue in this case is whether the court determines that NFTs are securities, similar to appreciating company shares. If the court finds that BAYC NFTs and their native token Apecoin are securities, it would mean that Yuga Labs may not have fulfilled the necessary disclosure and registration obligations related to issuing securities. (Decrypt)

4. Voyager rejects Alameda's acquisition proposal, stating it is a lowball bid that would harm customers

On July 25, cryptocurrency lending company Voyager rejected acquisition proposals from FTX and Alameda, stating that the plan to restructure the company is better and will be able to deliver cash and as much cryptocurrency as possible to all customers in a timely manner. Accepting the acquisition proposal would harm customers, including capital gains tax consequences, unfairly limiting the value of each Voyager user account to the value on July 5, and canceling the VGX token, which would "destroy immediate value exceeding $100 million."

Voyager's lawyers stated that the acquisition plan only benefits Alameda and FTX in liquidating Voyager's assets, disguised as a lowball bid masquerading as a white knight.

According to previous reports, FTX, along with its parent company FTX.US and operator West Realm Shires Inc., as well as Alameda Ventures, proposed an early claims plan for Voyager Digital users, with SBF emphasizing that the plan aims to help users quickly recover their assets. (Cointelegraph)

5. U.S. SEC investigates Coinbase over cryptocurrency listing issues

On July 26, the U.S. Securities and Exchange Commission (SEC) is investigating its regulated listed company Coinbase, suspecting that it allowed Americans to trade unregistered "securities." Sources say this investigation predates last week's insider trading lawsuit.

Previously, the SEC stated last week that seven cryptocurrencies listed on Coinbase are securities in an unrelated insider trading case against a former product manager at the exchange. SEC Chairman Gary Gensler has also stated that, given some of the cryptocurrencies already listed on Coinbase, he believes they should be registered as national securities exchanges. (CoinDesk)

6. Spice DAO, which purchased an unpublished manuscript of "Dune" for 2.66 million euros, announces dissolution

On July 29, Spice DAO, which previously purchased an unpublished manuscript of the "Dune" movie for 2.66 million euros, announced its dissolution and plans to return ETH to Spice token holders.
In January of this year, the DAO organization Spice DAO announced that it successfully bid 2.66 million euros (approximately 3.03 million USD) for the unpublished manuscript of the "Dune" movie directed by Alejandro Jodorowsky. The project planned to publicly release the book (within legal limits), create an original animated limited series inspired by the book to sell to streaming services, and support community derivative projects. It is reported that Spice DAO previously raised 2,608 ETH through juicebox, worth nearly 8.7 million USD, and the excess funds will be used to cover scanning, storage costs, and other activities, subject to DAO community voting. (Decrypt)

7. Zhou Hongyi: Many play-to-earn games and other Web3 models are zero-sum, I have some reservations about them

On July 29, Zhou Hongyi, founder of 360 Company, stated in an exclusive interview with "China Entrepreneur Magazine" that whether Web3.0, blockchain, and the metaverse can achieve disruption depends on whether there are enough small application scenarios to improve bit by bit, which will attract users. The metaverse and Web3 should not be made too grand; grand narratives often do not succeed easily. According to the theory of disruptive innovation, any force that changes the world has two characteristics when it first emerges: first, it is very small, and second, it can change certain applications in the world.

In addition, Zhou Hongyi also studied play-to-earn games and found that many Web3 models similar to games are zero-sum models, and he has "some reservations" about them. However, he stated that new things should not be dismissed outright; Web3 and the metaverse can also start from some micro details. He prefers to define the metaverse as a supporting role, serving B2B and B2G scenarios. (China Entrepreneur Magazine)

8. Mirror launches Web3 subscription service, allowing readers to connect wallets to subscribe to content

On July 27, Mirror announced the launch of a Web3 subscription service. The new feature allows readers to subscribe to any content published on Mirror using their wallets and receive email notifications when new content is published. Mirror stated that wallet-based communities will promote new modes of creation, new modes of participation, and new business models. (Source Link)

9. Bithumb's largest shareholder Vident confirms negotiations with FTX regarding Bithumb acquisition

On July 26, Bithumb's largest shareholder Vident confirmed that it is in contact with FTX regarding the acquisition of Bithumb, stating that "all possibilities are being discussed, including sale, exercising the right of first refusal for acquisition, or joint operation, and relevant information will be re-disclosed when specific matters are decided within a month."

It is reported that Vident holds 10.23% of Bithumb Korea and 34.22% of Bithumb Holdings, the holding company of Bithumb Korea. On July 23, Bloomberg reported, citing sources, that FTX is negotiating the acquisition of the South Korean cryptocurrency exchange Bithumb. (Source Link)

10. THORChain plans to integrate networks such as Avalanche, Dash, Haven, Monero

On July 26, decentralized cross-chain trading protocol THORChain announced the areas of focus for the next phase, including increasing RUNE binding to nodes and increasing total assets in LPs to generate more trading volume. In addition, THORChain plans to integrate networks such as Avalanche, Dash, Haven, and Monero.

It is reported that THORChain has focused on network security and stability over the past year. After the mainnet launch, THORChain is transitioning to scalability and adoption phases to drive more trading volume, swaps, and total value locked (TVL) into the network. (Source Link)

11. Optimism launches native conditional trading system Drippie

On July 26, Ethereum Layer 2 scaling network Optimism launched a trust-minimized Ethereum native conditional trading system called Drippie, which allows transactions to be executed under specific conditions. Drippie allows for a series of checks/operations to program drips (in Solidity) to execute most of the on-chain operations required by Optimism daily.

Optimism uses drips to maintain the balances of various accounts, regularly transferring funds between L1 and L2, and even automatically paying for Drippie's own transactions. Drippie is built on top of other transaction automation systems, currently supported by Gelato, and plans to integrate Chainlink Keepers as a backup to ensure Drippie continues to operate. (Source Link)

12. Tether plans to liquidate all its commercial paper holdings by November

On July 27, stablecoin issuer Tether announced that as of today, its total exposure to commercial paper has decreased to approximately $3.7 billion (down from $30 billion in July 2021), and it plans to further reduce this to about $200 million by the end of August 2022, and to zero by the end of October or early November 2022. Additionally, its portfolio does not hold Chinese commercial paper.

Tether stated that the spread of false information is the biggest threat currently facing the cryptocurrency industry, and it will continue to ensure a diversified portfolio while limiting risk exposure to individual issuers or assets. (Source Link)

13. South Korean prosecutors issue "entry notification" for Do Kwon and restrict Terraform executives from leaving the country

On July 27, according to South Korean media Dong-A Ilbo, South Korean prosecutors have issued an "entry notification" for Do Kwon regarding fraud charges related to the collapse of Terra and Luna, and have issued exit bans for current and former executives of Terraform Labs, including co-founder Shin Hyun-seong and former vice president Kim Mo. It is reported that Do Kwon is currently residing in Singapore.

Previously, on July 20, South Korean prosecutors raided several cryptocurrency exchanges in South Korea to investigate the collapse of Terra and related fraud cases, seizing new evidence of money laundering related to Terra. (Source Link)

14. Harmony releases compensation proposal for Horizon theft incident, plans to issue additional ONE tokens

Harmony today released a compensation proposal for the theft incident involving the cross-chain bridge Horizon, planning to hard fork the Harmony blockchain, increase the supply of ONE, and compensate users affected by the Horizon theft incident in the form of ONE tokens over a three-year period, with token distribution occurring monthly. The compensation proposal includes 86 million ONE to support a few DeFi lending protocols and maintain ecosystem operations. It is reported that the Horizon theft incident resulted in the loss of approximately 65,000 wallets and assets worth $99,340,030.

The proposal offers two compensation options: Option one estimates a 100% reimbursement, minting 4.97 billion ONE, which would be issued monthly over three years at 138 million ONE (valued at $2.76 million at a price of $0.020), gradually entering circulation. Option two estimates a 50% reimbursement, minting 2.48 billion ONE, which would be issued monthly over three years at 69 million ONE (valued at $1.38 million at a price of $0.020), gradually entering circulation.

Voting on the proposal by the community will begin on August 1 and end on August 15. It is reported that the community generally holds a negative attitude, with users concerned about the impact of increased token supply on the price of ONE. (CoinDesk)

15. Algorithmic stablecoin protocol Nirvana suffers attack, tokens plummet 90%
On July 28, the decentralized algorithmic stablecoin protocol Nirvana, based on Solana, reportedly suffered an attack, causing its stablecoin NIRV price to drop from $1 to as low as $0.09, currently rebounding to $0.11, with a maximum drop of over 90%; the price of the ANA token fell from $8.9 to as low as $1.5, a drop of up to 85%.

Nirvana's page information shows that its Stablecoin pool liquidity is nearly exhausted, with reserves of USDC, DAI, USDT, and USDH almost at zero, leaving only 7.105 million protocol Stablecoin NIRV.

SlowMist monitoring analysis indicates that Nirvana suffered a flash loan attack with a total loss of approximately $3.9 million, and the attacker may have exploited a price calculation loophole in ANA for arbitrage. (Source Link)

16. Lido initiates updated treasury diversification proposal, plans to sell 10 million LDO with a one-year lock-up period to Dragonfly Capital

On July 28, the Lido Finance community initiated an updated treasury diversification proposal, planning to sell half of the original purchase amount (2% of the total LDO supply) to Dragonfly Capital, which is 1% of the total LDO supply (10 million LDO), while the remaining 1% will be processed at a future date, and these tokens will have a one-year lock-up period. The proposal will be submitted for voting around 22:00 UTC on July 27. Upon completion of the voting, Dragonfly Capital will select the higher price between the previous weighted average price plus a 50% premium (approximately $1.45) and the 7-day weighted average price plus a 5% premium, and if the LDO price exceeds $2.25 during the voting schedule, Dragonfly will be able to withdraw from the purchase commitment.

Previously reported, Lido Finance's vote on selling 1% of tokens to Dragonfly Capital (at a trading price of $1.452153, totaling 14.52 million DAI) was not passed, with 66.61% opposing votes and 33.31% supporting votes. (Source Link)

17. Miami to collaborate with TIME magazine, Mastercard, and Salesforce to launch 5,000 NFTs

On July 29, Miami Mayor Francis X. Suarez announced that the city will collaborate with TIME magazine, Mastercard, and Salesforce to launch 5,000 NFTs on Ethereum.

It is reported that this NFT series is designed by 56 different Miami artists, representing the city's 56 square miles, and is planned for release in December. Time USA will help determine the city's NFT strategy and execute the project, while Mastercard will provide exclusive offers for Miami NFT holders, and Salesforce will manage the minting and primary sales process of the NFTs through its new NFT cloud platform. (decrypt)

18. Oasis Labs partners with Meta to build a privacy-preserving platform to support AI model fairness development

On July 29, Oasis Labs, the developer of the privacy computing network Oasis Network, announced a partnership with the renowned tech company Meta. As an important technical partner of Meta, Oasis Labs has built a platform using secure multi-party computation (SMPC), whose cryptographic technology not only provides a high level of privacy protection for individuals' sensitive data but also helps Meta measure bias and fairness, supporting the development of AI model fairness, establishing Responsible AI and responsible data use to promote a fairer and more inclusive society.

It is reported that Oasis Labs aims to leverage blockchain, privacy computing, and privacy protection technologies to establish a series of related platforms and products, further promoting personal privacy protection, data governance, and responsible data use. Oasis's technology focuses on making it easier for developers to integrate privacy-protecting data storage, governance, and computation. (Source Link)

Important Financing/Venture Capital News

1. Bertelsmann Asia Investments (BAI) completes $700 million first-phase fundraise

On July 25, according to official updates, Bertelsmann Asia Investments (BAI) announced that it has recently completed its first-phase fundraise of $700 million. This is the original Bertelsmann Asia Investments fund's first independent fundraising, exceeding its target and attracting investments from numerous internationally renowned institutional investors, including sovereign wealth funds, large insurance companies, internet giants, and top-tier mother funds (FoF). The European media giant Bertelsmann Group has also continuously supported it for 15 years.

It is reported that BAI Capital's founding and managing partner Long Yu founded Bertelsmann Asia Investments in 2008, having invested in over 200 internet and technology companies, achieving nearly 20 IPOs and over 40 unicorns. (Source Link)

2. Digital wallet operator TNG Digital completes approximately $168 million financing, led by Lazada

On July 25, Malaysian digital wallet Touch 'n Go eWallet service operator TNG Digital announced the completion of 750 million ringgit (approximately $168 million) financing, led by Lazada and Touch'n Go.

It is reported that TNG Digital was co-founded by Touch'n Go and Ant Group, and has successfully raised a total of 1 billion ringgit (approximately $224 million) in the past 18 months, aiming to further strengthen its market leadership in e-commerce, digital finance, and payment sectors in Southeast Asia. TNG Digital has previously used cryptocurrency to reduce risks and delays. (Source Link)

3. Investment app Shares completes $40 million Series B financing, plans to enter Web 3 space and venture into crypto business

On July 25, British investment app Shares announced the completion of $40 million in Series B financing, led by Valar Ventures, backed by Silicon Valley investor Peter Thiel. To date, the company's total financing has reached $90 million. Shares plans to use this latest financing to accelerate its expansion in the European market and enter the Web 3 space and launch crypto business.

It is understood that Shares was founded in 2022, providing a "social trading" platform for first-time investors. By combining social and trading features, users can buy, sell, and share their investment views through sharing headlines and GIFs. Its main user base consists of Generation Z and millennials. (tech.eu)

4. Public chain Aptos completes $150 million financing, led by FTX Ventures and Jump Crypto

On July 25, the new public chain project Aptos, founded by members of the Diem team, completed $150 million in financing, led by FTX Ventures and Jump Crypto, with other investors including Griffin Gaming Partners, Franklin Templeton, Circle Ventures, and Superscrypt.

In March, Aptos completed a $200 million strategic financing round, led by a16z, with participation from Tiger Global, Katie Haun, Multicoin Capital, Three Arrows Capital, FTX Ventures, and Coinbase Ventures. (The Block)

5. ARK sells approximately $75 million worth of COIN stock at an average price of about $53

On July 27, whale tracking account @unusual_whales tweeted that ARK Invest sold nearly 1.41 million shares of Coinbase stock today at a low price of $53 (valued at approximately $74.73 million), while ARK's average cost for COIN stock was $254.65.

At the same time, Coinbase's stock fell 21% at today's close, with a closing price of $52.9. Additionally, the U.S. Securities and Exchange Commission is investigating whether Coinbase improperly allowed users to trade digital assets that should have been registered as securities. (Source Link)

6. Unstoppable Domains completes $65 million Series A financing at a $1 billion valuation, led by Pantera Capital

On July 27, Web3 digital identity platform Unstoppable Domains announced that it raised $65 million in Series A financing, achieving a valuation of $1 billion, with this round led by Pantera Capital and participation from Mayfield, Gangeels, Alchemy Ventures, Redbeard Ventures, Spartan Group, OKG Investments, Polygon, CoinDCX, and CoinGecko.

It is reported that Unstoppable Domains is a company that builds digital identity tokens as non-fungible tokens (NFTs), and plans to use this funding to reduce friction in crypto payments between applications and establish a reputation-based rewards program. (The Block)

7. AntPool invests $10 million to support the ETC ecosystem, Bitmain accepts ETC payments for purchasing mining machines

On July 27, AntPool CEO Lv Lei stated at the World Digital Mining Summit that AntPool has invested $10 million to support the ETC ecosystem and plans to continue investing more funds. The $10 million will be used for application development and exploration of the ETC mainnet to enhance the overall performance of the network. Additionally, Bitmain announced at the conference that it will support ETC for purchasing all Antminer models. (CoinDesk)

8. Web3 information aggregation platform Coinfeeds raises $2 million in seed funding, with participation from FTX and Coinbase
On July 28, Web3 information aggregation platform Coinfeeds raised $2 million in seed funding, with participation from FTX Ventures, Coinbase Ventures, Protocol Labs, Huobi Ventures, and Y Combinator. It is reported that Coinfeeds was co-founded by former Uber data scientist Moyi Dang and senior professionals from Uber, Robinhood, and Microsoft, and has developed a crypto news summary bot and API that allows users to monitor social media dynamics of Web3 and NFT projects. (Source Link)

9. Move-to-Earn app Sweat Economy completes $13 million financing, with participation from Electric Capital and others

On July 29, Move-to-Earn app Sweat Economy completed $13 million in financing, with investors including Electric Capital, Spartan Capital, Jump, GSR, and the NEAR Foundation, as well as co-founders of Polkadot Bjorn Wagner, Polygon co-founder Sandeep Nailwal, and Civic founder Vinny Lingham.

It is reported that the project aims to incentivize users to improve their health by staying active and earn in-app tokens that can be redeemed for products, services, and donations. (Coindesk)

10. Lending protocol Aurigami completes $12 million financing through token sale, led by Dragonfly Capital and Polychain Capital

On July 29, Aurora lending protocol Aurigami completed $12 million in financing through a token sale, of which $9.5 million was raised through private token sales, and $2.5 million was raised through IEO on KuCoin, Bybit, and Impossible Finance. This round of financing was led by Dragonfly Capital and Polychain Capital, with participation from Coinbase Ventures, Alameda Research, Jump Crypto, Amber Group, and QCP Capital, with individual investors including Aurora CEO Alex Shevchenko, Etherscan CEO Matthew Tan, former ParaFi partner Santiago Santos, and CoinGecko co-founders Bobby Ong and TM Lee. This round of financing will be used to expand the team and develop the ecosystem.

It is reported that Aurigami is a DeFi lending protocol on the NEAR ecosystem's EVM scaling network Aurora, and according to DefiLlama data, its current TVL is approximately $22.42 million, making it the third-largest DeFi protocol on Aurora. Aurigami plans to support USN as a borrowable asset and support cross-chain lending within the year. (The Block)