LianGuai Daily | JPEX involved amount has reached HKD 1.2 billion; Cryptocurrency startup Bastion completes $25 million financing.

LianGuai Daily | JPEX involved amount hits HKD 1.2 billion; Bastion, a crypto startup, raises $25 million.

Today’s headline:

Hong Kong police: JPEX case suspected of conspiracy to defraud, involving a total amount of HKD 1.2 billion

Qiu Dagen: Hong Kong Legislative Council is conducting a second round of consultations on stablecoins, hoping to announce regulatory conditions in the middle of next year

Circle’s native USDC officially launches on the Polkadot network

• How did North Korean hackers use LinkedIn and social engineering to steal $3.4 billion in cryptocurrency?
• Exclusive Interview with Wintermute Co-founder Accumulated Trading Volume of 20 Trillion USD in 6 Years, the Secret to Success of a Well-known Market Maker
• LianGuai Daily | FTX Claims Portal Website Has Resumed Operations; JPEX Temporarily Shuts Down All Functions of the Gaming Hall

Citigroup launches token services, entering the digital asset field

Optimism has started its third round of airdrops, distributing 19 million OP tokens to over 31,000 addresses

Polygon zkEVM mainnet test version will undergo the Dragonfruit upgrade on September 20th

Crypto startup Bastion completes $25 million financing, led by a16z crypto

Blockchain Capital raises $580 million for two new crypto funds

Regulatory news

Binance.US once again refuses to provide operational documents to the SEC

According to CoinDesk, documents submitted to the court on Monday showed that BAM Trading, the entity behind Binance.US, has once again refused to provide the requested operational documents to the SEC. BAM Trading’s lawyers stated in the documents that the SEC’s requests were “overly broad” or too burdensome, causing too much “inconvenience” to the exchange. The SEC had previously requested a series of documents from BAM, including records of the company’s handling of client assets, proof of reserves, and statements of overall financial condition. One of the requests was related to the exchange’s alleged use of a custody service called Ceffu to transfer funds of U.S. customers overseas. The SEC claimed that these requests were intentionally ignored by Binance.US.

According to another court document, the SEC has urged the Washington D.C. court to approve an investigation into the issue of asset custody by Binance.US. In the document, the SEC reiterated its concerns about Binance’s use of the custody platform Ceffu, stating that the investigation results so far indicate an “urgent need for examination.” The SEC claims that “Cefu” is an entity of Binance, not just a provider of digital asset wallets. The SEC also stated that Ceffu, formerly known as Binance Custody earlier this year, may also provide services to Binance.US, leading to the transfer of funds of U.S. customers out of the country, which violates the previous agreement.

At a subsequent hearing, Judge Zia Faruqui of the U.S. District Court for the District of Columbia did not make any rulings on the SEC’s request for evidence disclosure or Binance.US’s opposition, but encouraged both parties to work together on various requests for evidence discovery. The SEC and BAM agreed to hold a hearing on October 12 and submit a joint status report by October 10.

The Federal Reserve will announce the September interest rate decision early on September 21

According to First Financial, the Federal Reserve will announce the September interest rate decision at 2:00 a.m. Beijing time on September 21, and Fed Chairman Powell will hold a press conference at 2:30 on the same day.

Qiu Dagen: Hong Kong Legislative Council is conducting a second round of consultations on stablecoins, hoping to announce regulatory conditions in the middle of next year

At the 9th Global Blockchain Summit of the 2023 Shanghai Blockchain International Week, Hong Kong Legislative Council Member Christopher Cheung delivered a keynote speech entitled “Prudently Promoting the Sustainable Development of Web3 in Hong Kong.” Cheung stated that after Hong Kong began issuing licenses to virtual asset service providers on June 1, the next step is to explore what types of products can be bought and sold, develop innovative products, determine who can buy these products, and who cannot. These will be differentiated based on professional investors and retail investors. Currently, the Legislative Council is conducting a second round of consultations on stablecoins, with the hope that Hong Kong’s regulatory conditions for stablecoins can be announced by mid-next year, allowing stablecoin participants to issue stablecoins in Hong Kong.

During the conference, Cheung mentioned his recommendations to the Chief Executive of Hong Kong last month, including tokenization, digital Hong Kong dollars, and stablecoins. He hopes that these proposed policies can make Hong Kong the center of digital assets.

Hong Kong Police: JPEX case suspected of conspiracy to defraud, involving HKD 1.2 billion

At a briefing on the JPEX virtual asset trading platform case, Senior Superintendent of the Hong Kong Police Commercial Crime Bureau, Kong Hing-fan, stated that the JPEX case is suspected of conspiracy to defraud. The platform actively promoted its services and products to the public through advertisements, social media, different platforms, offline exchange stores, and internet celebrities, claiming “low risk and high return,” thereby attracting investors. The police attach great importance to this case and have set up a hotline urging people who suspect they have been deceived to report the case as soon as possible. As of 12 o’clock last night, the police had received 1,641 reports, involving a total amount of HKD 1.2 billion. After the Securities and Futures Commission issued a warning, JPEX still raised the withdrawal limit to 999 USDT, making it difficult for users to withdraw funds. Yesterday, the police arrested eight people, including the owners and principals of offline exchange stores.

Later today, the Hong Kong Securities and Futures Commission stated that JPEX has continued to worsen and issued a warning, stating that the “list of license applications” is not suitable for public disclosure. The Hong Kong police superintendent stated that JPEX controls almost all user assets and that its platform token is worthless, and it arbitrarily adjusts the withdrawal limit. The acting inspector of the Hong Kong Customs and Excise Department stated that more arrests cannot be ruled out in the JPEX case and that HKD 67 million in suspicious criminal proceeds may be confiscated.

NFT

OpenSea, Blur, and Rarible restrict the trading of NFT series “Stoner Cats” after action by the US SEC

According to Cryptoslate, at least three NFT marketplaces have restricted the trading of the NFT series “Stoner Cats.” Each marketplace has taken different measures to limit Stoner Cats. OpenSea and Blur continue to display the items in the series but prevent transactions by hiding listings and offers on individual NFT pages. An OpenSea spokesperson confirmed that Stoner Cats cannot be bought, sold, or transferred on their platform but stated that the series has not been delisted or removed.

In addition, Rarible has hidden all the collections of Stoner Cats. The website states that the collection has been “removed from the public eye.” Rarible assures users that they still own the relevant NFTs; like most NFTs, these items can freely circulate on the blockchain or be traded on other compatible markets. Rarible responded by saying that they have blocked access to Stoner Cats based on their market monitoring of recent events.

This project was organized by American actress Mila Kunis, who also voiced a character in the accompanying animated web series for the NFT collection. Regulatory actions may be a direct or indirect factor behind the decline in the NFT market for this series of NFTs. On September 13, the U.S. Securities and Exchange Commission (SEC) charged the parent company of Stoner Cats with violating securities regulations and announced that the company has agreed to pay a $1 million settlement.

Project Updates

Circle’s native USDC officially launches on the Polkadot network

According to Circle’s official blog, Polkadot USDC is now available for developers and users on the Polkadot network. Circle accounts and the Circle API can easily access Polkadot USDC and transfer it to parallel chains within Polkadot using the XCM protocol. It supports 24/7 trading and lending on parallel chains such as Centrifuge, HydraDX, and Moonbeam.

Citigroup launches token service, enters the digital asset field

According to Bloomberg, Citigroup has launched a token service as part of its broader push to provide digital assets to institutional clients. The new product converts customer deposits into digital tokens and is provided by the company’s Treasury and Trade Solutions division, which has been focused on using the service to improve cash management and trade finance capabilities.

The statement mentioned that for Citigroup’s new product, the company will rely on a private blockchain owned and managed by the bank. Customers do not need to set up their own digital wallets but can access the service through the bank’s existing systems.

Optimism begins its third airdrop, distributing 19 million OP tokens to over 31,000 unique addresses

According to official announcements on Twitter, Optimism has started its third airdrop. 19 million OP tokens will be distributed to over 31,000 unique addresses. The airdrop started at 4:10 AM on September 19 Beijing time and the tokens will be directly distributed to addresses that delegated their OP voting rights between January 20, 2023, and July 20, 2023. This airdrop does not require any claims and will be sent directly to eligible addresses. The official reminder is not to interact with any websites claiming to distribute the third airdrop.

Polygon zkEVM mainnet test version to undergo Dragonfruit upgrade on September 20

According to official announcements, the Polygon zkEVM mainnet test version will undergo a Dragonfruit upgrade at 3:30 PM on September 20 Beijing time, with an expected duration of about 2 hours. Once the upgrade is complete, the Polygon zkEVM mainnet test version will be in sync with the latest version of Solidity. The network will still be available during the upgrade, but a downtime of approximately 2 minutes is expected to facilitate the restart of the sequencer. In addition, the Polygon zkEVM cross-chain bridge will be temporarily unavailable between 3:30 PM and 5:00 PM.

The TIP token claim page of the Web3 social application Tip Coin has experienced multiple outages since going live.

According to official account X, the Web3 social application Tip Coin announced the opening of token claim for TIP and the launch of DEX liquidity early this morning. The TIP token claim page went down within minutes of going live, and the official announced at 1:49 am that the issue had been fixed.

However, upon checking by LianGuaiNews, the claim page is currently experiencing problems again, showing “page not found” when opened. The official has yet to make a statement on this.

Canto will migrate to Ethereum and transform into an Ethereum Layer 2 driven by zero-knowledge proofs.

According to The Block, Canto, the Layer 1 public chain in the Cosmos ecosystem, will migrate to Ethereum and transform into an Ethereum Layer 2 that uses zero-knowledge proofs. Canto is collaborating with Ethereum scaling development company Polygon to achieve this, utilizing the Polygon Chain Development Kit (CDK) to support the new design, with a focus on RWA assets. Canto stated, “Polygon CDK provides Canto with a powerful suite that allows Canto to provide ZK L2 and extend the community’s permissionless sovereignty, security, and liquidity as public goods.”

Ren Jingxin: Cyberport in Hong Kong has close ties with more than 40 Web3 funds, with a total asset value of 4 billion USD.

At the 9th Blockchain Global Summit of the 2023 Shanghai Blockchain International Week, Ren Jingxin, the CEO of Cyberport Management Limited, delivered a keynote speech entitled “Grasping the New Power of the Web3 Era.” Ren Jingxin stated that 2023 is not only the 20th anniversary of Cyberport but also the first year of Web3 in Hong Kong. He also mentioned that Cyberport is collaborating with Hang Seng Bank in Hong Kong and will test the general consumption of Cyberport Dollars in Cyberport in September. Currently, Cyberport Dollars can be used to purchase coffee and snacks in designated coffee shops and Hong Kong-style tea restaurants in Cyberport.

In addition, Ren Jingxin stated that Cyberport now has over 190 Web3 companies, with the number continuing to increase, including companies in various fields such as underlying blockchain infrastructure, fintech, and digital entertainment. Cyberport’s Web3 base focuses on talent cultivation, industry development, and public awareness.

Regarding the current situation of Web3 funds in Hong Kong, Ren Jingxin stated, “During this period, we have been in close contact with more than 40 funds specializing in Web3, and their combined assets or funds amount to 4 billion USD.”

FTX files a lawsuit against SBF’s parents for “recovering tens of millions of dollars in fraudulently transferred and misappropriated funds.”

According to CoinDesk, bankrupt cryptocurrency exchange FTX has filed a lawsuit against founder Sam Bankman-Fried’s (SBF) parents Joseph Bankman and Barbara Fried to “recover tens of millions of dollars in fraudulently transferred and misappropriated funds.” The amended filing seeks a court declaration of bankruptcy damages, the return of any property or payments previously provided to SBF’s parents by FTX, and punitive damages for “willful, intentional, reckless, and malicious conduct.” It is worth noting that Joseph Bankman and Barbara Fried, SBF’s parents, are both professors at Stanford Law School.

The document states that “FTX Trading paid a total of $18,914,327.82 to Blue Water, owned by Joseph Bankman and Barbara Fried, including taxes, fees, costs, and various expenses related to Blue Water, totaling over $90,000. Joseph Bankman’s understanding of tax law and unique understanding of FTX Group’s chaotic corporate structure allowed him to conveniently transfer a total of $10 million in cash gifts from Alameda Ltd. to himself and Barbara Fried. They used their decades of experience and legitimacy as experienced law professors not to help FTX Group, but to plunder it for their own enrichment and the enrichment of the causes they love. Joseph Bankman helped other FTX insiders dissipate FTX Group’s funds through donations and helped cover up a whistleblower complaint in September 2019. At the explicit request of Barbara Fried, FTX Group made tens of millions of dollars in political donations to SBF’s political donation strategy MTG or causes supported by MTG.”

Injective collaborates with Caldera to launch the inEVM testnet, with mainnet deployment planned for the fourth quarter.

According to The Block, Injective, a Layer 1 blockchain based on Cosmos, is collaborating with customizable rollup project Caldera to launch its Layer 2 solution, inEVM, on the testnet. This allows Ethereum applications to run natively in the Injective ecosystem. InEVM, compatible with the Ethereum Virtual Machine, will allow Ethereum developers to deploy their applications on Injective, such as decentralized exchanges, without the need to change the code. The inEVM testnet officially launched today, with mainnet deployment planned for the fourth quarter.

Zhao Changpeng responds to executive departures: Binance has added six to seven hundred people in the past few months.

Binance founder Zhao Changpeng said at an internal event, “Although many people have been talking about many senior management departures at Binance recently, many people have also joined Binance, and we have added about six to seven hundred people in the past few months. We hope to attract more talent to join this industry or join Binance. Decentralization may be a very important core for the future, and we are now under too much pressure because of centralization.”

The proposal to “Increase GHO borrowing interest rate to 2.5%” by the Aave community has been approved.

Funding news

Cryptocurrency startup Bastion completes $25 million in funding, led by a16z crypto.

According to Bloomberg, cryptocurrency startup Bastion has completed a $25 million seed round of funding, led by a16z crypto, with participation from Laser Digital Ventures under Nomura Group, Robot Ventures, Not Boring Capital, and others. Bastion provides services such as cryptocurrency custody. The company’s initial employees include regulatory and compliance executives from cryptocurrency exchanges such as Kraken.

Bastion founders Riyaz Faizullabhoy and Nassim Eddequiouaq (formerly Chief Technology Officer and Chief Security Officer of a16z crypto, respectively) also worked in Meta’s blockchain security infrastructure department for two years before joining a16z Crypto.

Blockchain Capital raises $580 million for two new crypto funds

San Francisco-based venture capital firm Blockchain Capital has raised $580 million for two new cryptocurrency investment funds. The company, founded in 2013, announced today the launch of its sixth early-stage venture fund and its first opportunity fund, with a total raised amount of $580 million. Payment giant Visa is one of the companies providing funding. Visa and LianGuaiyLianGuail also invested in Blockchain Capital’s fifth $300 million fund, which closed in 2021.

According to today’s announcement, the company specifically focuses on investing in crypto startups that specialize in infrastructure, gaming, DeFi, consumer, and social sectors. The company added that the volatility of the industry in the past year or two “has exposed the dangers of short-term thinking and misled many about this emerging technology.”

Key Data

Total market value of stablecoins has declined for 18 consecutive months, down 10% this year

According to Reuters, research firm CCData stated that while the entire crypto ecosystem has rebounded from its lows in 2022, the market value of stablecoins is set to decline for 18 consecutive months (including this month). As of September 14th, this figure has shrunk nearly 10% this year to $124.4 billion (approximately $123.7 billion as of today).

After falling below $80 billion in the first three months of this year, the market value of USDT reached a historical high of $83.8 billion in July and has since dropped to around $82.9 billion. LianGuaiolo Ardoino, Chief Technology Officer of Tether, stated that the value of USDT is supported by its popularity in certain regions, and Tether has stickiness among users because it operates on Tether in the entire emerging market, Central and South America, and Central Asia.

The market value of USDC has dropped more than 53% from its historical high set in June last year and is currently hovering above $26 billion. Dante DisLianGuairte, Chief Strategy Officer and Global Policy Director of Circle, stated that the collapse of Silicon Valley banks and other regional banks earlier this year still brings uncertainty to the market, although he emphasized that growth is not the only measure of the company’s success. He said, “The US has experienced a temporary derisking, but this is not a result of regulatory ambiguity. This is more a result of the lingering effects of the banking crisis, and I think even so, we will start to see some adjustments in the market.”

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