LianGuai Daily | Sam Altman to return to OpenAI as CEO; HTX and Heco cross-chain bridge under hacker attack

LianGuai Daily | Sam Altman to resume role as CEO at OpenAI; HTX and Heco cross-chain bridge targeted by hackers

Today’s News Highlights:

US CFTC fines Binance $1.35 billion, the largest fine in CFTC history

Binance: Not accused of funds misappropriation and market manipulation, will continue to promote cooperation with global regulatory agencies

OpenAI: Sam Altman returns to OpenAI as CEO

• Sending money and interest, how to play the new L2 Blast launched by the founder of Blur?
• A whopping $4.3 billion fine or will it force Binance to dump and sell coins? The newly appointed CEO boldly claims to have strong revenue and profits.
• After a rise of 120%, will there be a new momentum? Three charts explain the logic behind the Bitcoin bull market.

Binance and Zhao Changpeng plead guilty, Zhao Changpeng resigns

Bloomberg: Zhao Changpeng’s sentence is not expected to exceed 18 months

New Binance CEO: Company’s capital structure is debt-free, revenue and profits remain strong

Genesis sues Gemini to recover $689 million “Priority Transfer” assets

HECO Bridge and HTX suspected of losing $110 million

Regulatory News

US Treasury will retain access to Binance’s books, records, and systems for five years

The US Treasury announced that the Financial Crimes Enforcement Network (FinCEN) has reached a $3.4 billion settlement with Binance, and a $968 million settlement with the Office of Foreign Assets Control (OFAC). This is the largest fine in the history of the US Treasury. To ensure Binance’s compliance with the settlement terms, including complete withdrawal from the US, the Treasury will retain access to Binance’s books, records, and systems for five years. Failure to fulfill these obligations may result in significant additional fines, including a $150 million deferred fine. If Binance fails to comply with the required compliance commitments and regulatory terms, these fines will be imposed by FinCEN.

In addition, a monitor will oversee necessary remedial measures to address Binance’s failure to fulfill anti-money laundering and sanctions obligations. The monitor will also conduct regular reviews and report its findings and recommendations to FinCEN, OFAC, and the CFTC, ensuring Binance’s ongoing compliance with the settlement agreement terms.

Late news tonight, Binance grants VIP users the privilege of receiving advance notice when being investigated by law enforcement agencies; The US CFTC fines Binance 1.35 billion dollars, making it the largest fine in CFTC history.

Fed meeting minutes: “Act with caution” on interest rate issues, suitable to maintain a restrictive monetary policy for a period of time

The Federal Reserve released the minutes of the Federal Open Market Committee (FOMC) meeting from October 31 to November 1, which discussed the development of financial markets, expectations for monetary policy, and the development of monetary markets. The minutes stated that the participants agreed to maintain the target range for the federal funds rate at 5.25% to 5.5% in order to achieve maximum employment and inflation rates of 2% over the long term. All FOMC members agreed to “act with caution” on interest rate issues and unanimously believed it was suitable to maintain a restrictive monetary policy for a period of time until inflation shows a clear decline towards the target. If the received information implies insufficient progress towards achieving the inflation target, it would be appropriate to further tighten monetary policy. Journalist Nick Timiraos, known as the “mouthpiece of the Federal Reserve” and the “new Federal Reserve news agency,” commented that at the recent meeting when the decision was made to pause interest rate hikes, Federal Reserve officials did not want to conclude that they had completed the rate hikes. However, the minutes suggested that officials may be willing to keep rates unchanged at least for this year.

AI

OpenAI: Sam Altman will return to OpenAI as CEO

OpenAI announced on the X platform: “We have reached a provisional agreement to bring back Sam Altman as CEO of OpenAI, and form a new initial board of directors composed of Bret Taylor, former Co-CEO of Salesforce Inc. (chairman), former US Secretary of the Treasury Larry Summers, and CEO of Quora Adam D’Angelo. We are working together to figure out the details.”

Late news tonight, OpenAI co-founder Greg Brockman will also return to OpenAI; The new OpenAI board plans to review the circumstances of Sam Altman’s dismissal; Sources say Microsoft may have representatives on the OpenAI board.

Musk: AI model Grok will be open to all X Premium+ subscribers next week

Musk stated on the X platform that Grok, the first AI model of the xAI artificial intelligence project, will be open to all X Premium+ subscribers next week. Earlier on November 5th, Musk released the Grok system. Update: Musk stated that access to Grok will be gradually opened to users and discussed cooperation with the Tesla board of directors and xAI.

Project Updates

Binance and Zhao Changpeng admit guilt, Zhao Changpeng resigns

According to Bloomberg, Binance Holdings Limited and its CEO Zhao Changpeng have admitted to criminal charges such as money laundering and violating American sanctions, including allowing transactions with Hamas and other terrorist organizations. Binance agrees to plead guilty to the criminal charges and pay over 4.3 billion US dollars in fines. Zhao agrees to resign and pay a fine of 50 million US dollars. In a document released on Tuesday, Binance was charged with three crimes, including violations of anti-money laundering regulations, conspiracy to conduct unlicensed money transfer business, and violations of U.S. sanctions regulations. Binance will pay a criminal fine of 1.8 billion US dollars and forfeit 2.5 billion US dollars. The 4.3 billion fine includes 3.4 billion US dollars paid to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network and 968 million US dollars paid to the Department of the Treasury’s Office of Foreign Assets Control.

The U.S. Treasury Department stated that Binance’s violations include failing to prevent and report suspicious transactions with terrorists, including Hamas, the Palestinian Islamic Jihad, Al-Qaida, and the Islamic State in Iraq and Syria. Court documents show that Binance allowed at least 1.1 million related transactions involving Iranian clients, totaling more than 898 million US dollars. U.S. Treasury Secretary Yellen stated in a press release, “Binance disregarded its legal obligations in pursuit of profits. Binance chose to prioritize growth rather than comply with U.S. legal requirements. Binance completed billions of dollars in transactions without collecting necessary customer information or monitoring trades.” Zhao Changpeng will also face a maximum of 10 years in prison. His lawyer stated in court on Tuesday that his sentencing will be postponed for 6 months. The judge stated during the guilty plea hearing that Zhao’s settlement agreement includes waiving the right to appeal, on the condition that his sentence does not exceed 18 months.

Binance issues announcement that it was not accused of misappropriation of funds and market manipulation and will continue to cooperate with global regulatory bodies. Zhao Changpeng states that Richard Teng will succeed as Binance CEO and may engage in passive investment in the future; Binance co-founder He Yi stated that Binance was not accused of misappropriating client funds or manipulating the market and will further strengthen compliance; Richard Teng states that his job focus at Binance will be maintaining user confidence, cooperating with regulatory agencies, and promoting the popularity of Web3; Zhao Changpeng will pay a bail of 175 million US dollars and agrees to return to the United States two weeks before sentencing on February 23; Bloomberg estimates that Zhao Changpeng’s sentence will not exceed 18 months. Zhao Changpeng publishes internal letter: I will have to endure some pain, but I will make it through.

Coinbase will suspend Polymath (POLY) trading on December 6

Coinbase Assets tweeted that, based on recent reviews, Polymath (POLY) trading on Coinbase.com, Coinbase Exchange, and Coinbase Prime platforms will be temporarily suspended around 3 am Beijing time on December 6. POLY is in the process of migrating from Ethereum to Polymesh Network (POLYX). Coinbase currently has no plans to support POLYX. The deadline to upgrade POLY to POLYX is January 31, 2024. If users still hold POLY after the trading suspension, they will need to use the upgrade bridge and self-custody wallet to convert POLY to POLYX before the upgrade bridge closes in 2024, or they may face significant asset loss.

Binance to launch 1000BONK and PYTH U perpetual contracts

Binance’s futures trading platform will launch USDⓈ-M 1000BONK and PYTH perpetual contracts with leverage of up to 50x on November 22, 2023, at 10:00 PM and 10:30 PM Beijing time, respectively.

HashKey Exchange to list Aave

According to an official announcement, Aave (AAVE) will be listed on HashKey Exchange, a licensed virtual asset trading platform in Hong Kong, on November 23, 2023, at 4:00 PM Hong Kong time. Deposits and withdrawals are already open, and trading of AAVE/USD pair is limited to professional investors only.

Bloomberg analyst: Grayscale met with US SEC officials to discuss Bitcoin spot ETF

James Seyffart, a Bloomberg analyst, posted on X platform that Grayscale met with the US Securities and Exchange Commission (SEC) Trading and Markets Division (responsible for approving 19b-4 applications) yesterday. It is reported that other potential Bitcoin spot ETF issuers also met with the SEC in the past week.

Binance’s new CEO: Company capital structure debt-free, revenue and profit still strong

Conor Grogan, a Coinbase executive, posted on X platform that according to Binance Corporate’s Proof of Reserves (PoR) data, its crypto asset holdings include a total of $6.35 billion in assets and $3.19 billion in stablecoins, excluding off-chain cash balances or funds not in the PoR wallets. Binance is most likely to fully pay the $4.3 billion Department of Justice fine without selling any crypto assets.

Binance’s new CEO, Richard Teng, retweeted the post and commented, “Our business foundation is very strong. Binance continues to operate the world’s largest cryptocurrency exchange by trading volume. Our capital structure is debt-free, with moderate fees. Despite charging low fees to users, our revenue and profit remain strong.”

Matrixport: Guilty plea agreement beneficial to Zhao Changpeng and Binance, will help approve Bitcoin ETF in the United States

According to the latest report from Matrixport, with Zhao Changpeng stepping down and the fine amount being lower than the previously worried $10 billion, Binance is likely to remain one of the top three exchanges in the next 2-3 years. There might be pressure for a “rationalization adjustment” of the company with 6000 employees. Although this guilty plea agreement does not involve the SEC in the United States, it is a very favorable outcome for Zhao Changpeng and Binance itself. Some may argue that US institutions are clearing the industry this year by dissolving banks related to US cryptocurrency, as two banks operated an internal ledger where crypto companies could use it for fiat transfers 24/7. It can be said that there are few major players remaining, and the market is digesting a significant risk-avoidance event.

Regarding the impact of this regulation, the report analysis states that more exchanges will strengthen their compliance plans and become part of the monitoring sharing agreement, which will help approve Bitcoin ETF in the United States. Through this guilty plea agreement, the expectations for Bitcoin ETF are likely to have increased to 100%, as the entire industry will be forced to comply with the rules that traditional financial institutions must follow. More importantly, the whitewashing of this industry will strengthen institutional investors’ adoption case for Bitcoin and may make Bitcoin a safe haven asset in investor portfolios.

Institutions are coming, and all the enforcement actions by US institutions this year are a step towards this direction. With favorable macro conditions continuing and institutional demand, 2024 is likely to be another strong year for Bitcoin – Zhao Changpeng may return during the next bear market period in 2026.

Genesis sues Gemini to recover $689 million worth of “priority transfers” assets

According to CoinDesk’s report, cryptocurrency lending institution Genesis Global Capital has sued its former business partner, cryptocurrency exchange Gemini Trust, seeking to recover over $689 million. The accusation claims that Gemini prioritized the transfer of Genesis’ “total amount of no less than approximately $689,302,000” at the expense of other creditors and demands the court to “correct this unfair situation.”

The document states that with the market turmoil caused by the collapse of LUNA and TerraUSD as well as Three Arrows Capital, Gemini made an “unprecedented withdrawal” before applying for bankruptcy, resulting in a “bank run”. During the so-called grace period of ninety days, Gemini demanded repayment of loans previously provided to Genesis. These asset transfers were “avoidable” and based on “information and belief,” Genesis is “insolvent.”

Foreign Media: Binance Labs has repaid funds to some external investors this summer

According to The Block, Binance Labs, the venture capital division of Binance, raised $500 million for a Web3 fund called “Binance Labs Fund II” in 2022, securing its first external capital. However, according to insiders, a large portion of the donations provided by external supporters or LPs has been repaid in the summer; nearly half of the $150 million invested by LPs in the Binance Labs fund has been repaid; these funds have not yet been deployed to startup investments. Binance spokesperson declined to comment on the matter. It is currently unclear why the venture capital division has repaid its LPs.

Important Data

HECO Bridge and HTX suspected losses of $110 million

According to The Block, unexpected fund movements indicate that HECO BRIDGE and HTX have lost $110 million.

Subsequently, Wintermute Research Director Igor Igamberdiev and blockchain security firm PeckShield stated that an initial estimate suggests that the Heco bridge was stolen $86.6 million. These funds were immediately sent to decentralized exchanges and sold for other tokens. Igamberdiev estimates that there are other vulnerabilities in the cryptocurrency exchange HTX and mentions suspicious transfers totaling $23.4 million.

Currently, HTX has suspended internal deposits and withdrawals and HECO chain gateway deposits and withdrawals, Justin Sun promises to fully compensate user assets

Over the past 24 hours, $231 million in contract liquidations occurred across the entire network, with long positions liquidated at $190 million

According to Coinglass data, over the past 24 hours, the cryptocurrency market experienced $231 million in contract liquidations across the entire network, with 96,943 positions being liquidated. Among them, long positions were liquidated at $190 million, and short positions were liquidated at $41.7498 million. In terms of currency breakdown, BTC liquidations were approximately $64.9583 million, accounting for the largest share, ETH liquidations were approximately $26.9775 million, SOL liquidations were approximately $11.252 million, BNB liquidations were approximately $6.0435 million, and XRP liquidations were approximately $5.9157 million.

FTX/Alameda address transferred tokens worth more than $28 million 3 hours ago

According to blockchain analyst Yu Jin, FTX/Alameda related addresses transferred tokens worth more than $28 million 3 hours ago, including 975,859 AVAX tokens worth $18.83 million transferred to the crypto broker FalconX and 12,602,687 MATIC tokens worth $9.27 million transferred to Coinbase.

A whale has transferred approximately 1.38 million SOL tokens, worth about $74.2 million, in the past 12 hours.

According to Pai Shield monitoring, the SOL whale (address starting with 7nsWpv) has transferred approximately 1.38 million SOL tokens, worth about $74.2 million, in the past 12 hours.

TVL of L2 network Blast has exceeded $109 million.

According to Lookonchain monitoring, the TVL of Blast, a new L2 network launched by Blur founder LianGuaicman, has exceeded $109 million. Blast has deposited 45,654 ETH tokens (worth about $91 million) into Lido, exchanged stablecoins for 18 million DAI and deposited them into Maker.

In addition, a wallet starting with 0x49E9 has deposited 2,000 ETH tokens (worth about $4 million) into Blast, and boby1337.eth has deposited 2.5 million USDC tokens into Blast.

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