Wu said Zhou’s selection Hong Kong regulatory agency opens retail trading, Curve hacked, Binance US Department of Justice progress and news Top10 (0729-0805)

Wu announced Zhou's Hong Kong regulatory agency selection, Curve hack, Binance US DOJ progress, and Top10 news (0729-0805).

Author | Wu Talks Blockchain

This Week’s Top 10 News

1. Hong Kong Securities and Futures Commission approves license upgrade for HashKey Pro and OSL, allowing retail trading

On August 3rd, HashKey announced that licenses 1 and 7 have been upgraded, making it the first licensed trading platform in Hong Kong for retail users. In addition to supporting fiat currency deposits and withdrawals, HashKey will also collaborate with Standard Chartered Bank to provide fiat currency deposit and withdrawal services. Furthermore, the platform has opened up compliance OTC trading, offering users more trading options. Following HashKey, OSL (OSL Digital Securities Limited) has also received approval for license upgrade from the Hong Kong Securities and Futures Commission, and its initial offering will be BTC and ETH.

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2. US Internal Revenue Service issues new guidelines: POS blockchain cryptocurrency rewards are taxable

On August 1st, according to @BillHughesDC, the latest guidelines from the US Internal Revenue Service state that if a taxpayer, using the cash method of accounting, holds a POS blockchain cryptocurrency and receives additional cryptocurrency units as a reward upon validation, the taxpayer must include the fair market value of the received validation rewards in their total income for the tax year in which they have control and dominion over these rewards. The fair market value is determined based on the date and time the taxpayer obtains control and dominion over the validation rewards. Similarly, if a taxpayer pledges cryptocurrency held on a proof-of-stake blockchain through a cryptocurrency exchange and receives additional cryptocurrency units as a reward, the same provisions will apply.

3. Binance Weekly Updates

a. US Department of Justice officials considering fraud charges against Binance, exploring alternative options given its market impact

On August 3rd, according to Semafor, officials from the US Department of Justice are considering fraud charges against Binance. However, federal prosecutors are concerned that if they prosecute Binance, it may trigger a run on the exchange similar to what FTX experienced in its bankruptcy, resulting in monetary losses for consumers and potentially causing panic in the cryptocurrency market. Prosecutors are considering alternative options such as fines and deferred or non-prosecution agreements. This outcome would be a compromise, holding Binance accountable for alleged criminal behavior while minimizing harm to consumers.

b. CZ attempted to shut down Binance.US earlier this year

On August 2nd, according to The Information, Binance CEO CZ attempted to shut down Binance.US earlier this year. Binance.US CEO Brian Shroder expressed opposition. CZ then tried to sell Binance.US and held discussions with executives from Gemini and sovereign wealth funds.

c. CZ: Will announce the next partner for a USD stablecoin, in addition to FDUSD

On July 31st, CZ stated in the latest AMA that in addition to the recently announced FDUSD, the next partner for a stablecoin will be announced. Binance also has a small team trying out algorithmic stablecoins. In the future, Binance will collaborate with stablecoins from different regions to achieve greater decentralization and work with as many stablecoins as possible. In addition, CZ criticized the lack of audit reports on USDT and believes that USDT is somewhat like a black box with risks.

d. Binance FZE has obtained the MVP license for operation issued by the Dubai Virtual Assets Regulatory Authority (VARA)

On July 31st, Binance announced that its Dubai subsidiary, Binance FZE, has obtained the MVP license for operation issued by the Dubai Virtual Assets Regulatory Authority (VARA). Eligible users can now access regulated virtual asset services, such as fiat currency deposit and withdrawal services, through Binance FZE in Dubai.

e. Binance Japan officially announces 32 tokens available for trading

On August 1st, Binance officially launched a cryptocurrency trading platform that complies with local regulations in Japan. Japanese customers can apply for accounts starting from mid-August and can start trading on the new platform from December 1st. Binance Japan has announced 32 tokens available for trading, including BTC, ETH, BNB, ADA, ALGO, ASTR, ATOM, AVAX, AXS, BAT, BCH, CHZ, DAI, DOGE, DOT, ENJ, ETC, IOST, LINK, LTC, MATIC, MKR, ONT, QTUM, SAND, SHIB, SOL, TRX, XLM, XRP, XTZ, and ZIL.

4. FTX submits restructuring plan: Creditors categorized, FTT equity reset, or creation of a new offshore exchange

On July 31st, the FTX restructuring team submitted a restructuring plan, which includes the following main points:

1. Categorizing claimants into different groups, including FTX offshore users (referred to as “Dotcom claimants” in the documents), FTX US users, NFT users, general unsecured creditors, secured creditors, and subordinated creditors. General creditors include Alameda’s creditors or trading partners, while subordinated creditors are for taxes and fines.

2. The priority of claims will be determined based on “waterfall priorities,” and each class of creditors will receive repayment from the remaining claim pool proportionally after the claims of the preceding class of creditors are satisfied. The specific order of payments will be determined through negotiations with stakeholders.

3. FTT holders (whether on FTX or not), preferred equity, 510(b) claims, and other equity rights will be reset to zero.

4. Dotcom claimants have the option to consolidate their assets to create an offshore exchange.

On the same day, the FTX Creditors Union expressed their opinions on the FTX restructuring plan on Twitter. The Unsecured Creditors Committee (UCC) should select the team to operate FTX 2.0 and requested the resumption and recovery of tokens, as well as interest on their $2.6 billion cash holdings. The UCC criticized John Ray and his team for not investing this funds in short-term government bonds, calling them incompetent operators, and stated that they may oppose the upcoming motion to extend exclusive rights so that creditors can submit their own plans.

5. Australian Securities and Investments Commission (ASIC) has filed a federal court lawsuit against eToro’s cryptocurrency CFD products

On August 3, the Australian Securities and Investments Commission (ASIC) filed a federal court lawsuit against eToro’s contract for difference (CFD) products, accusing it of breaching its design and distribution obligations as well as its obligations to act efficiently, honestly, and fairly. ASIC believes that eToro’s actions may expose a large number of retail clients to significant risks of harm by offering CFD products that are unlikely to meet their investment objectives, financial situation, and needs. CFDs are leveraged derivative contracts that allow clients to speculate on the value changes of underlying assets, such as foreign exchange rates, stock market indices, individual stocks, commodities, or cryptocurrencies.

6. Tether releases the attestation opinion for the second quarter of 2023 completed by accounting firm BDO

On July 31, Tether released the attestation opinion for the second quarter of 2023 completed by accounting firm BDO: Excess reserves increased by approximately $850 million to $3.3 billion; operating profit exceeded $1 billion, with a quarter-on-quarter growth of 30%; total assets were $86.5 billion, and total liabilities were $83.2 billion.

7. MicroStrategy’s Bitcoin holdings increase to 152,800 coins in the second quarter

The latest earnings report released by MicroStrategy (MSTR) shows that as of July 31, MicroStrategy held 152,800 bitcoins, with an increase of 12,333 coins in the second quarter, marking the largest quarterly increase since the second quarter of 2021. The depreciation expense of the bitcoins held in the second quarter was $24.1 million, compared to $917.8 million in the same period last year and $18.9 million in the first quarter.

MicroStrategy previously announced plans to issue and sell up to $750 million in stocks to fund bitcoin purchases and other purposes. After the announcement, the price of bitcoin rose from around $29,200 to over $29,400. At the time of writing, the price of bitcoin is $29,036.

8. Litecoin network completes its third block reward halving

The Litecoin network has completed its third block reward halving at block height 2,520,000, reducing the block reward from 12.5 LTC to 6.25 LTC. As of writing, the price of LTC is $82.82, with a 9.0% decrease in the past 7 days.

9. Polygon Zero accuses zksync of copying and pasting its source code without attribution

On August 4, Polygon Zero accused zksync of copying and pasting its source code without attribution and making misleading statements about the original work, which violates the spirit of open source and harms the ecosystem. The important part of the Boojum library recently released by the zksync development team, Matter Labs, was copied and pasted from the Plonky2 proof system developed by Polygon Labs without proper attribution, and misleading claims were made about the performance of Plonky2 compared to Boojum.

Matter Labs denies the allegations made by Polygon Zero, stating that the code “clearly indicates the source” in one line at the top of one of the files. A spokesperson for Matter Labs said that Polygon’s blog post contains “false claims.” Polygon’s blog post also includes other examples where their code was obviously used without attribution from Matter Labs. Matter Labs has not yet addressed these examples but stated that they will provide a more detailed response “soon.”

10. Curve hacked, founder sells CRV

Vyper, the programming language for Ethereum, tweeted on July 31 at 12:44 (UTC+8) that recursive locks in versions 0.2.15, 0.2.16, and 0.3.0 are failing. At 12:45, Curve’s official Twitter account announced that many stablecoin pools using Vyper 0.2.15 were attacked due to the recursive lock failure, while other pools remained secure. According to reports, Alchemix, JPEG’d, MetronomeDAO, deBridge, and Ellipsis suffered a cumulative loss of over $26.76 million on the evening of July 30. The attack on the CRV-ETH pool occurred at 03:08 on July 31, resulting in a loss of over $51.95 million, according to reports from PShield on July 31.

Due to the large amount of CRV that Curve’s founder used as collateral for loans on multiple lending platforms, CRV is now facing potential liquidation risks. In order to avoid large-scale liquidation on the blockchain, as of the time of writing, Curve’s founder has sold a total of 114.025 million CRV to 24 investors/institutions through OTC transactions, receiving $45.61 million in funds. The selling activity is still ongoing, according to @EmberCN.

On August 5, NFT lending protocol JPEG’d announced that JPEG’d DAO has confirmed receipt of funds returned by the attacker. The attacker returned 6,106 ETH, which accounts for 10% of the funds, or 610.6 WETH, as a reward for the white hat hacker. In addition, the Curve pool attacker has returned a total of 4,820 alETH and 2,258 ETH to the Alchemix Finance protocol, worth approximately $12.7 million. The attacker stated that the return of funds was to prevent the destruction of the project and not out of concern for being found.

Key Financing Events

• Privacy protocol zkLianGuaiss raised $2.5 million in seed funding.

• Socket completed a $20 million Series A funding round led by a16z.

• Solv Protocol raised $6 million in funding, with participation from Laser Digital, Bytetrade Labs, and others.

• DeFi protocol Conic Finance announced a successful $1 million funding round.

For more industry financing events, please visit crypto-fundraising.info.

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