Weekly News Highlights | SBF Released on $250 Million Bail; Binance US Acquires Voyager Digital Assets for $1.022 Billion
Binance US will acquire Voyager Digital assets for $1.022 billion.整理：润升，ChainCatcher
Important News
1. Binance: The Big Four Accounting Firms Are Unwilling to Conduct Reserve Proof Audits for Private Crypto Companies
On December 19, news from Blockworks reported that a Binance spokesperson stated that the Big Four accounting firms—PwC, Deloitte, KPMG, and EY—are unwilling to conduct reserve proof audits for private crypto companies. After Mazars suspended its services for cryptocurrency clients, Binance has contacted several large firms and is still looking for companies willing to take on this work.
It is reported that Deloitte is currently working with Coinbase to provide audit and accounting services, while EY has partnered with crypto tax and accounting technology provider TaxBit. (blockworks)
2. DCG Invests in GBTC with a Loss of $871 Million, Loss Rate of 66%
On December 19, media statistics revealed that since the first quarter of 2021, DCG has spent a total of $1.305 billion to purchase 54,823,667 shares of GBTC at an average price of $23.8. Based on the latest market price ($7.92), DCG has incurred a loss of $871 million, with a loss rate of 66%; if calculated at the fair value ($15.42), DCG still faces a loss of $460 million.
Earlier, according to The Wall Street Journal (WSJ), Grayscale CEO Michael Sonnenshein stated in a letter to investors that if GBTC cannot be converted into a Bitcoin ETF, a tender offer for 20% of the $10.7 billion issued trust fund shares may be proposed. (Odaily星球日报)
3. Binance US to Acquire Voyager Digital Assets for $1.022 Billion
On December 19, Voyager Digital Ltd. announced that its operating company, Voyager Digital LLC, has chosen BAM Trading Services Inc. (operating as Binance.US) as the highest and best bidder for its assets.
Binance.US's bid sets a clear direction for unlocking Voyager customer funds as soon as possible, valued at approximately $1.022 billion, including (i) the fair market value of Voyager's cryptocurrency portfolio at a future undetermined date, estimated at $1.002 billion at current market prices, plus (ii) additional consideration equivalent to $20 million in incremental value.
The company's claims against Three Arrows Capital remain in the bankruptcy estate, and any future recoveries from these claims and other unreleased claims will be allocated to the estate's creditors. Binance.US aims to return cryptocurrency to customers in kind based on court-approved payments and platform capabilities. (Source Link)
4. New Public Chain Linera Releases White Paper, Introducing the Idea of Parallel Operation of Multiple Chains within the Same Validator Group
On December 20, a new public chain Linera, founded by former Libra employees, released its white paper. The white paper introduces the idea of "micro-chains," which allows many chains (potentially millions) to operate in parallel within the same group of validators. In Linera, scalability is achieved by adding chains rather than increasing the size or rate of blocks. Linera encourages users to operate their own micro-chains. When a micro-chain is operated by a single user, Linera uses a simplified, memory-less consensus protocol inspired by reliable broadcasting.
Linera's founder and CEO Mathieu Baudet is a former Meta employee who helped create the Libra blockchain. Linera completed a $6 million seed round of funding led by a16z at the end of June this year. (Source Link)
5. Sui Foundation Reiterates No Token Airdrop Plan, Will Assess Community Contributions to Open Token Purchases
On December 20, the Sui Foundation disclosed the details of its token community access plan, which will allow early-stage Sui community members to purchase SUI tokens. As part of this plan, SUI tokens will also be offered to those who helped test Sui applications or promote Sui adoption on the Sui network before the mainnet launch.
Additionally, the Sui Foundation reiterated that there is currently no official plan for an SUI airdrop. Regarding the eligibility for the token community access plan, the Sui Foundation will build a standard over the next few months to assess the contributions of Sui community members.
Specifically, this includes: helping node operators and developers debug issues; enhancing ecosystem security by regularly identifying and reporting scams; developers who narrowly missed Sui Foundation grants; volunteers in community or project management (e.g., moderators on the Sui Discord server); contributors who help improve the quality of Sui documentation, codebases, or applications; early advocates and users who have been promoting Sui and helping others learn and use it; additionally, participants in the CapyHolidays competition may also have qualifying opportunities. (Source Link)
6. Bloomberg: FTX Creditors' Claims Are Attracting Interest from Investment Giants, Valuations Mostly Between 5% and 13% of Face Value
On December 21, Bloomberg reported, citing informed sources, that the claims of FTX Group creditors are attracting interest from large distressed asset investment firms, with companies like Baupost Group and Oaktree Capital inquiring about claims from FTX customers whose assets are trapped on the exchange. Citigroup Inc., Cowen Inc., and Seaport Global Holdings LLC are trying to act as intermediaries in this emerging market.
Jay Conklin, an executive partner at FTX claims brokerage Park Walk LLC, expects more significant transactions to occur. However, for now, the claims being traded are relatively small, with negotiations rising for accounts holding $100 million or more. Valuations are mostly between 5% and 13% of face value, and prices are rising with increasing investor interest. (Source Link)
7. Ankr Attack Incident Report: Attack Originated from a Malicious Supply Chain Attack by a Former Team Member, Working with Law Enforcement to Prosecute
On December 21, Web3 infrastructure provider Ankr released an attack incident report detailing the investigation into the exploitation of the aBNBc Token vulnerability. Ankr stated that the attack originated from a former team member who maliciously conducted a supply chain attack by inserting a malicious code package that could compromise private keys once a legitimate update was performed. Ankr is currently working with law enforcement to prosecute this former team member.
Ankr indicated that this could affect any protocol, and the team is supporting internal human resources processes and security measures to strengthen future security posture. Ankr is implementing several improvements to security, including requiring multi-signature authentication and time locks for all updates, enhancing internal security measures, implementing new monitoring and notification systems, and refining the process for using DeFi protocols. (Source Link)
8. Bloomberg: SBF Has Been Extradited to the U.S.
On December 22, Bloomberg reported that around 7:30 AM Beijing time on December 22, former FTX CEO Sam Bankman-Fried (SBF) was extradited to the U.S. from a private airport in the Bahamas, with the plane landing in Westchester, New York. (Source Link)
9. Former Alameda CEO and FTX Co-Founder Plead Guilty and Released on $250,000 Bail
On December 22, The New York Times reported that the U.S. Attorney for the Southern District of New York announced on Wednesday evening that former Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang have pleaded guilty to federal charges and are cooperating in the federal criminal case against SBF.
Additionally, The Washington Post reported that Caroline Ellison and Gary Wang were released on Monday on $250,000 bail. It is understood that if prosecutors believe the two are helpful to the case and do not violate agreements, they may recommend leniency. (The Washington Post)
10. Binance Responds to Multiple Media and Community Concerns: There Is No Liquidity Issue
On December 22, Binance published a blog post responding to recent media and community concerns. Regarding the temporary suspension of USDC withdrawals, Binance stated that users' USDC and other stablecoin balances and new deposits will be automatically converted to BUSD at a 1:1 ratio. When there is a large-scale USDC withdrawal, the platform needs to convert BUSD back to USDC first. The conversion between PAX/BUSD and USDC requires a dollar account at a bank in New York, and can only be done during banking hours, which caused the delay.
Regarding whether Binance has sufficient reserves for users to withdraw, Binance stated that all users' assets on Binance are supported 1:1, and users have the right to withdraw at any time. Binance will not misuse users' funds for any trading or investment, nor does it have any borrowing debts, and is not on the creditor list of any recently collapsed companies.
Additionally, Binance responded to topics such as "Mazars and the Big Four accounting firms refusing to serve Binance," "only launching BTC verification," and "whether Binance destroyed FTX." (Source Link)
11. SBF Released on $250 Million Bail
On December 23, SBF was taken to the U.S. by the FBI overnight after being released from the Bahamas on Wednesday, making his first appearance in a New York court facing felony charges in the U.S. SBF was released on $250 million bail, secured by his parents. It is reported that SBF's release was secured by his parents' house in California and includes a long list of requirements. According to the agreement, he is not allowed to conduct financial transactions exceeding $1,000, cannot open new lines of credit, cannot leave home except for exercise, and must undergo drug abuse and mental health treatment. (Source Link)
12. FTX and Its Creditors Compete for Approximately $450 Million Worth of Robinhood Stock
On December 23, FTX requested assistance from the U.S. bankruptcy court in its fight for approximately $450 million worth of Robinhood stock. Currently, 90% of the stock is held by Emergent Fidelity Technologies Ltd., controlled by SBF. In addition to SBF, FTX's creditor BlockFi and FTX creditor Yonathan Ben Shimon are also trying to control these shares. It is reported that FTX creditor Yonathan Ben Shimon has been authorized by a local court to handle the Robinhood stock and is preparing to start selling these shares. FTX believes these stocks actually belong to FTX and is seeking to freeze them before the bankruptcy resolution is implemented. (Source Link)
13. Two Employees Suspected of Being AAX Executives Arrested in Hong Kong for Alleged "Virtual Currency Investment Fraud"
On December 23, a press conference was held in Hong Kong regarding the AAX fraud case, where it was revealed that two employees, aged 37 and 44, have been arrested. Sources suggest that the two may be AAX executives based on their ages.
Previous Report, AAX has hidden its official YouTube channel and has suspended withdrawals for over 15 days. (Source Link)
14. Zhao Changpeng Explains Nine Reasons for "Binance FUD": Some Hate CEXs, Insufficient Cryptocurrency Adoption, etc.
On December 24, Binance CEO Zhao Changpeng provided explanations for the recent "Binance FUD":
Some in the crypto industry simply hate CEXs, regardless of whether CEXs help accelerate cryptocurrency adoption;
Some people may blame and attack Binance when they incur losses or face other issues in trading;
Some industry peers view Binance as a competitor;
Some media may exacerbate the situation;
Cryptocurrency has not yet achieved mass adoption, with possibly less than 5% globally, and many remain skeptical about crypto;
Policymakers still wish to protect traditional finance and do not want to face cryptocurrency innovation;
Generalizing, believing "if one CEX is bad, then all other CEXs must also be bad";
A small number of people may harbor racial discrimination against Chinese Canadians;
Writing articles about "Binance" to gain more clicks. (Source Link)
15. Caroline Ellison's Plea Agreement Exposed: Full Cooperation with the U.S. Attorney's Office May Lead to Dismissal of Criminal Charges
On December 24, the plea agreement of former Alameda Research CEO Caroline Ellison with the U.S. Attorney's Office for the Southern District of New York was disclosed, including a $250,000 bail, surrender of travel documents, and asset forfeiture, meaning Caroline Ellison will not be allowed to leave the U.S.
Additionally, the plea agreement revealed that if Caroline Ellison fully cooperates with the U.S. Attorney's Office (SDNY) and any other law enforcement agencies designated by the U.S. Attorney's Office, she will not face further criminal charges, except for criminal tax violations related to wire and commodity fraud (due to the mixing of funds between FTX and Alameda, she may face lawsuits from other regulatory agencies).
Earlier, ChainCatcher reported that the U.S. Attorney's Office for the Southern District of New York announced charges against Caroline Ellison and Gary Wang, both of whom have pleaded guilty to federal charges. Caroline Ellison admitted to conspiracy to commit wire fraud against FTX customers, conspiracy to commit wire fraud against Alameda Research creditors, conspiracy to commit commodity fraud, conspiracy to commit securities fraud, and conspiracy to commit money laundering, among seven charges, with a maximum sentence of 110 years in prison. (Source Link)
16. Polygon zkEVM Launches Final Testnet Version
On December 25, Polygon zkEVM tweeted that the final testnet version with significant performance upgrades is now live, with the mainnet coming soon. Since the public testnet of Polygon zkEVM launched in October, it has processed 21,966 transactions, generated and verified 14,930 ZK proofs, and created 10,508 wallet addresses, among other achievements. (Source Link)
Important Financing/Venture Capital News
1. Bitcoin Hardware Wallet Developer Foundation Devices Completes $7 Million Financing, Led by Polychain Capital
On December 19, Bitcoin tool developer Foundation Devices announced the completion of a $7 million seed round of financing, led by Polychain Capital, with participation from Greenfield Capital, Lightning Ventures, Third Prime, Warburg Serres, Unpopular Ventures, and Bolt. Foundation Devices will use the funds to continue expanding its engineering and design team and building products, with a recent focus on software services.
Previously, Foundation Devices announced the launch of its Bitcoin hardware wallet, Passport, in July 2020. It is reported that Foundation Devices was founded by Zach Herbert, former COO of the decentralized storage project Sia. (CoinDesk)
2. NFT Social Platform Revel Completes $7.8 Million Seed Round Financing, Led by Dragonfly
On December 19, NFT social platform Revel announced the completion of a $7.8 million seed round of financing, led by Dragonfly Capital, with participation from Union Square Ventures, Sfermion, 6th Man Ventures, Gaingels, Wagmi Ventures, Alumni Ventures, Global Impact Ventures, Hansa Labs, and Polygon. The funds will be used to expand Revel's Web3 interoperability, AI generation and collaboration features, and social functionalities. (TechCrunch)
3. NFT Company Utopia Group Announces Completion of €10 Million Financing, Led by Asterius VC
On December 21, NFT company Utopia Group announced the completion of €10 million in financing, led by Asterius VC, which will provide consulting support for its first NFT series, Utopia Avatars.
Utopia Avatars will mint a total of 9,922 NFTs on the Ethereum blockchain, and the project has the support of celebrities such as Randy Zuckerberg, sister of Mark Zuckerberg, Pepe Bastón, Deepak Chopra, Maha Abouelenein, and Huda Kattan. (Source Link)
4. Decentralized Reputation Scoring Platform Finxeed Announces $10 Million Strategic Financing from DBank
On December 23, decentralized reputation scoring platform Finxeed announced a memorandum of understanding (MoU) with DBank Group (Chain Bank Group), in which DBank plans to provide $10 million in strategic investment.
Finxeed will use the funds to create a trust network to enhance trust, transparency, and security in Web3, especially in the DeFi sector. DBank will also help Finxeed expand its product offerings and develop innovative services for customers, such as trust-based community building, news and media verification, and on-chain trade scoring and certification.
Finxeed was established in 2022, and its team consists of professionals from finance, technology, and marketing, specializing in providing solutions for the digital world. (Source Link)
5. Mobile Game Developer Gumi to Receive $53 Million Investment from SBI Holdings and Square Enix for Developing Blockchain Games and Investing in Web3 Companies
On December 23, according to Nikkei News, Japanese mobile game developer Gumi has received investment from SBI Holdings and Japanese gaming giant Square Enix Holdings, and will raise 7 billion yen (approximately $53 million) through a third party allocation of shares to these two companies on January 11, 2023.
Based on voting rights, SBI Holdings holds approximately 22% of Gumi, while Square Enix Holdings holds approximately 3%. The funds raised will be used to develop games utilizing blockchain technology and invest in Web3-related companies. Gumi is developing a blockchain game that will allow users to hold and trade in-game items as NFTs. (Source Link)
