Weekly Highlights | Paxos Ordered to Stop Issuing More BUSD; Blur Announces Token Economic Model

整理：润升，ChainCatcher

Important News

1. Insider: The US SEC Plans to Sue Paxos for Issuing BUSD as an Unregistered Security

On February 13, news from the Wall Street Journal cited sources reporting that stablecoin issuer Paxos is facing a lawsuit from the US Securities and Exchange Commission (SEC) regarding issues related to BUSD. The SEC has sent a notice to Paxos indicating possible enforcement action, stating that the BUSD issued and listed by Paxos is an unregistered security, planning to sue Paxos for violating investor protection laws, and may take enforcement action.

Shortly thereafter, the New York Department of Financial Services ordered stablecoin issuer Paxos to stop issuing more BUSD tokens. According to a statement from Binance, Paxos will continue to manage the redemption of the product. (Source link) (Source link)

2. Zhao Changpeng: Paxos Has Guaranteed Fund Safety, May No Longer Use BUSD as the Main Trading Pair in the Future

On February 13, Binance founder Zhao Changpeng responded to the recent SEC investigation into stablecoin issuer Paxos, stating that Paxos will continue to provide product services and manage the redemption function. Paxos guarantees that the funds are safe and fully covered by its bank reserves, which have been audited multiple times by various auditing firms… In the foreseeable future, Binance will continue to support BUSD. We do foresee that users will migrate to other stablecoins over time. We will also make corresponding product adjustments, such as discontinuing the use of BUSD as the primary trading currency, etc. (Source link)

3. Wang Huiwen Announces Entry into Artificial Intelligence, Claims to Build China's OpenAI

On February 13, Wang Huiwen, the former co-founder of Meituan, announced on social media that he is entering the field of artificial intelligence, claiming to build China's OpenAI. Wang stated that he will establish Beijing Lightyear Technology Co., Ltd., with a personal investment of $50 million, a valuation of $200 million, and mentioned, "I will not hold shares personally, with funds holding 25% of the shares, and 75% of the shares will be used to invite top R&D talents. The next round of financing has already seen top VCs subscribe for $230 million." (Source link)

4. Foreign Media: NFT Market Blur to Raise Funds at a Valuation of $1 Billion

On February 14, Twitter user @tier10k revealed that according to The Block Pro, the NFT market Blur will raise funds at a valuation of $1 billion. It is reported that Blur's total trading volume has surpassed 750,000 ETH, with nearly 1.6 million transactions, and the Blur airdrop will open for claims at 1:00 AM Beijing time on February 15. (Source link)

5. New York Department of Financial Services: Binance-Peg BUSD Issuance Unauthorized and Not Issued by Paxos

On February 14, the New York Department of Financial Services issued a notice regarding BUSD issued by Paxos, stating that Paxos is a limited-purpose trust company supervised by the New York State Department of Financial Services. It has now ordered Paxos to stop minting BUSD, as there are several unresolved issues regarding its oversight of the relationship with Binance concerning BUSD.

The New York Department of Financial Services authorized Paxos to issue BUSD on the Ethereum blockchain, but the department has not authorized Binance-Peg BUSD on any blockchain, and Binance-Peg BUSD is not issued by Paxos.

According to regulatory requirements, all stablecoins issued by regulated entities must be fully backed 1:1 by cash or cash equivalents. These reserves are regularly reviewed through third-party certifications and independent internal and external audits. Compliance with the New York Department of Financial Services' stablecoin guidelines and customized regulatory agreements is also part of the review process. (Source link)

6. Bloomberg: Circle Reported to NYDFS That Binance's Reserves Were Insufficient to Support BUSD

On February 14, stablecoin issuer Paxos issued a statement saying it has received a Wells Notice from the SEC but firmly disagrees with the SEC staff's opinion, as BUSD is not a security under federal securities laws. The BUSD issued by Paxos has always been backed 1:1 by dollar-denominated reserves, which are completely isolated and held in bankruptcy remote accounts. Paxos stated it will engage with SEC staff on this issue and is prepared to actively litigate if necessary. (Source link)

7. Blur Announces Token Economic Model: 51% Allocated to Community, Core Contributors, Investors, and Advisors Receive 29%, 19%, and 1% Respectively

On February 15, Blur announced its token economic model: the BLUR token is used for community governance, with the right to control the accumulation and distribution of the protocol's value, and governance powers also include setting protocol fees six months later (up to 2.5%) and issuing community grants. The total supply of BLUR is 3 billion tokens, with 51% allocated to the community, 29% to past and future core contributors (allocated over 4 years, with a transfer cap released in the first 4 months), 19% to investors (allocated over 4 years, with a transfer cap released in the first 4 months), and 1% to advisors (allocated over 4-5 years, with a linear release over 4-16 months).

Among the 51% allocated to the community, 360 million tokens (12%) are for this airdrop, and the remaining 1.17 billion tokens (39%) can be allocated to the community through contributor grants, community initiatives, and incentive programs. Of this 39%, 10% (117 million) has been confirmed for the next incentive distribution. According to the plan, this 1.17 billion tokens will be distributed 40% in the first year, 30% in the second year, 20% in the third year, and 10% in the fourth year. (Source link)

8. FTX Investors File Class Action Against Venture Capital Firms Including Sequoia Capital, Thoma Bravo, and Paradigm

On February 15, Bloomberg reported that a class action lawsuit filed on behalf of investors accuses venture capital and private equity firms, including Sequoia Capital, Thoma Bravo, and Paradigm, of participating in a promotional marketing campaign in 2021 to promote their own hundreds of millions of dollars in investments in FTX entities.

Investors claim this added a sense of "legitimacy" to FTX, which ultimately went bankrupt in November. Investors accuse the venture capital firms of violating state and federal laws, including false statements, false advertising, and civil conspiracy. (Source link)

9. Twitter CEO Elon Musk Plans to Step Down by the End of 2023

On February 15, Bloomberg reported that Twitter CEO Elon Musk stated via video link at the World Government Summit in Dubai that he plans to step down as Twitter CEO by the end of 2023 and is looking for a successor.

Musk said that before he steps down, he needs to stabilize Twitter's operations, including financial health and a clear product roadmap. (Source link)

10. Coinbase CEO: The US Should Clarify Crypto Legislation, Hong Kong and Europe Are Leading

On February 16, Coinbase CEO Brian Armstrong cited news that "Hong Kong will officially open crypto trading to all citizens in June this year," stating that the US may lose its long-standing status as a financial center due to the lack of clear regulations on cryptocurrencies and a harsh regulatory environment. Brian called on the US Congress to take action as soon as possible to clarify legislation. He pointed out that the EU, the UK, and Hong Kong are currently leading in terms of openness to crypto. (Source link)

11. Binance CSO: Binance Expects to Pay Fines to Resolve US Investigations into Its Business

On February 16, Binance Chief Strategy Officer Patrick Hillmann stated in an interview that the company expects to pay fines to resolve ongoing investigations by US regulatory and enforcement agencies into its business.

Patrick Hillmann stated that Binance has grown rapidly, initially being a company driven by software engineers who were unfamiliar with the laws and rules established to address bribery and corruption, money laundering, and economic sanctions risks. Hillmann noted that Binance has been working to fill the gaps in early compliance efforts but still expects regulators to impose fines for past conduct. (Wall Street Journal)

12. Hong Kong SAR Government Issues First Batch of Tokenized Green Bonds

On February 16, the Hong Kong SAR government announced the successful issuance of HKD 800 million in tokenized green bonds under the government's green bond program. This is one of the world's first tokenized green bonds issued by a government.

The 1-year HKD 2 tokenized green bond was priced yesterday, with a yield of 4.05%. This issuance is on a private blockchain network, with the Hong Kong Monetary Authority's (HKMA) Central Moneymarkets Unit (CMU) serving as the settlement and delivery system for the bonds, and the platform being Goldman Sachs' tokenization platform GS DAPTM.

ChainCatcher previously reported that Goldman Sachs' new digital asset platform GS DAP has officially launched. The platform is developed based on the Daml smart contract language and the privacy blockchain Canton, ensuring that data is shared only with qualified stakeholders through its privacy protocol while supporting the scalability needed for globally connected assets. (Source link)

13. Filecoin to Launch Smart Contracts in March

On February 17, according to a tweet from Filecoin's ecosystem growth lead "HQHan.eth," the decentralized storage project Filecoin will launch smart contracts in March, making it a mature L1. It is reported that FVM will bring smart contract functionality to Filecoin, and the official Filecoin account has also retweeted this tweet confirming the timeline.

Filecoin previously stated that it would launch FVM in March 2023. FVM will combine smart contracts with provable storage, which can be used to deploy programmable storage original languages, cross-chain interoperability bridges, data-centric decentralized autonomous organizations (DAOs), and Layer 2 solutions, among others. (Source link)

14. zkSync 2.0 Renamed to zkSync Era, Open for Project Mainnet Deployment

On February 17, Ethereum scaling solution zkSync announced that zkSync 2.0 has been renamed to zkSync Era, and it is now open to all projects, providing equal deployment opportunities on the mainnet for registered projects. During this phase, the mainnet will remain closed to end users to ensure that the team can deploy and test their applications in a closed environment before opening the system to external users. (Source link)

15. Zhao Changpeng Responds to "Binance Considering Delisting All US Token Projects Including USDC" as False News

On February 18, Binance founder Zhao Changpeng responded to previous news that "Binance is considering delisting all US token projects, including USDC," stating "False."

ChainCatcher previously reported that, according to Bloomberg citing insiders, Binance is considering delisting all US token projects, including USDC. (Source link)

16. Filecoin Releases Major Project Updates for 2023 on FVM, Data Computing, and Retrieval Market

On February 18, Filecoin Network released three major project updates for 2023: the Filecoin Virtual Machine (FVM) will gradually upgrade the protocol, continuing to drive its programmability roadmap, migrating system functions from proprietary space to user space; data computing (Bacalhau) will provide a fully distributed data processing system by the end of the year, capable of running on various devices everywhere, with enhanced functionality; the Filecoin retrieval market will bring more decentralized use cases this year, such as ultra-fast payments designed for data retrieval, enhanced mechanisms for data transfer protocols, and cryptoeconomic models. (Source link)

17. Forbes: Institutions Have Contacted Binance to Collaborate on Launching a New Stablecoin to Replace BUSD

On February 18, Binance Chief Strategy Officer Patrick Hillmann revealed that due to US regulators imposing a ban on BUSD issuer Paxos preventing the issuance of more tokens, several private and public entities have expressed interest in collaborating with Binance on new stablecoin initiatives, "especially entities in Europe and the Middle East."

It is reported that the "BUSD replacement" may not choose the US dollar as the anchor currency, but Patrick Hillmann was unwilling to provide more details. (Forbes)

Important Financing/Venture Capital News

1. Blockchain Gamified Social Media App TOKHIT Completes $100 Million Financing

On February 13, the blockchain-driven gamified social media app TOKHIT announced the completion of $100 million in financing, but the company did not disclose the investors' information or the valuation after this financing (TOKHIT revealed its valuation to be approximately $155 million at the beginning of 2022).

The TOKHIT platform helps content creators and NFT/cryptocurrency enthusiasts profit through social activities. Its co-founder Andrei Ureche stated that the platform will also provide NFT and digital asset trading, NFT staking, and other services in the future, allowing users to find more opportunities to collaborate with brands for incentives. (Source link)

2. Digital Asset Infrastructure Company Taurus Completes $65 Million Series B Financing Led by Credit Suisse

On February 14, Swiss digital asset infrastructure company Taurus completed $65 million in Series B financing, led by Credit Suisse, with participation from Arab Bank Switzerland and Investis.

It is reported that Taurus focuses on providing digital asset services such as custody and tokenization for financial institutions in Europe. The company completed $11 million in Series A financing in April 2020. Taurus stated that it plans to open offices in Paris and Dubai in the coming months and then expand its business to Southeast Asia and the Americas. To this end, Taurus plans to increase its workforce from 60 to around 100 this year. (The Block)

3. EVM-Compatible Blockchain Project Monad Labs Completes $19 Million Seed Round Financing Led by Dragonfly Capital

On February 14, EVM-compatible blockchain project Monad Labs, founded by former Jump Trading research head Keone Hon, completed $19 million in seed round financing, led by Dragonfly Capital, with participation from Placeholder Capital, Lemniscap, Shima Capital, Finality Capital, angel investors Naval Ravikant, Cobie, and Hasu.

The Monad blockchain will launch on the testnet in the coming months and plans to deploy to the mainnet later this year. Monad will adopt a proof-of-stake consensus mechanism and will be compatible with the Ethereum Virtual Machine (EVM). In April 2022, Keone Hon announced his departure from Jump Trading to establish the EVM-compatible new project Monad. (Source link)

4. "Rollup as a Service" Platform Caldera Raises $9 Million, Led by Sequoia and Dragonfly

On February 14, Web3 infrastructure provider and "Rollup as a Service" platform Caldera announced that it has raised $9 million in two rounds of financing, led by Sequoia Capital's Shaun Maguire and Dragonfly's Ani Pai, with participation from Neo, 1kx, Ethereal Ventures, and other angel investors. The funds will be used for hiring, partnerships, and integration.

Caldera allows anyone to launch and run dedicated, high-performance second-layer blockchain Rollups and operate lightweight, highly customizable blockchains while sharing Ethereum's security. By providing each application with its own "application Rollup," Caldera offers dedicated channels for application transactions, fundamentally reducing transaction costs and enabling projects to mitigate the risks of fee spikes and network interruptions. (Source link)

5. Crypto Index Startup Alongside Completes $11 Million Financing Led by a16z

On February 15, according to TechCrunch, crypto index platform Alongside completed $11 million in financing, led by a16z, with participation from Coinbase Ventures, Franklin Templeton Investments, Village Global, Not Boring Capital, and several angel investors.

In January of this year, the startup launched its first product, the Alongside Crypto Market Index (AMKT), allowing people to gain broad exposure to the entire crypto asset market through a single token. (Source link)

6. Web3 Communication Project Sending Labs Completes $12.5 Million Seed Round Financing Led by Insignia Venture Partners

On February 16, according to The Block, Web3 communication project Sending Labs completed $12.5 million in seed round financing, led by Insignia Venture Partners, MindWorks Capital, and Signum Capital, with participation from K3 Ventures, LingFeng Innovation Fund, UpHonest Capital, and Aipollo Investment. This round of financing began last August, and the valuation has not been disclosed. The funds will be used to accelerate integration with other Layer 1 and Layer 2 solutions, planning to add Avalanche and Arbitrum, as well as non-EVM chains like Solana and Sui. The remaining funds will also be used to develop industry-specific SDKs and launch a community ambassador program.

Sending Labs has also launched beta versions of two flagship products, the crypto chat platform SendingMe and the software development kit SendingNetwork for crypto application developers to build social features. (The Block)

7. YGG Completes $13.8 Million Financing with Participation from a16z Crypto and DWF Labs

On February 17, according to Tech in Asia, gaming guild Yield Guild Games (YGG) has raised $13.8 million through token sales, with participation from DWF Labs and a16z Crypto. YGG co-founder Gabby Dizon revealed that YGG will use this new funding to further develop its soulbound reputation tokens. (Source link)

8. Zero-Knowledge Proof Hardware Startup Cysic Completes $6 Million Seed Round Financing Led by Polychain Capital

On February 17, according to The Block, zero-knowledge proof hardware startup Cysic completed $6 million in seed round financing, led by Polychain Capital, with participation from Hashkey, SNZ Holding, ABCDE, A&T Capital, and the Web3.com Foundation. Co-founder Leo Fan stated that the seed round financing ended in December 2022. The funds will be used to expand the team and continue developing hardware solutions.

Cysic aims to provide hardware acceleration solutions for ZK proof protocols and already has 12 ecosystem partners, including Scroll, Nil Foundation, and Hyper Oracle. (Source link)

9. Agricultural Blockchain Technology Company GrainChain Completes $29 Million Financing

On February 17, according to Ledgerinsights, Texas-based GrainChain announced a $29 million financing round. This includes $10 million from Overstock, which provided Series A and B funding for GrainChain through Medici Ventures. The Medici fund is now managed by Pelion Venture Partners on behalf of Overstock, which has committed to reinvest an additional $10 million from its own funds. Cougar Capital from Brigham Young University is one of the other funding participants. To date, GrainChain's total financing has approached $40 million.

Among GrainChain's tens of thousands of users are many small farmers from the US or Latin America. The GrainChain system automatically collects data through IoT and mobile applications that can work offline. GrainChain provides a suite of solutions for farmers and buyers, most of which are based on blockchain and smart contracts. This includes tracking data from seed to harvest, inventory management, logistics, and transaction management. (Source link)