Wu’s Selection Zhu Su of Three Arrows suddenly arrested, Binance exits Russia, Mixin hacked for 200 million, MicroStrategy continues to buy BTC, and Top 10 news.

Wu's Selection Zhu Su arrested, Binance exits Russia, Mixin hacked for 200 million, MicroStrategy buys BTC, Top 10 news.

Author | Wu Talks Blockchain

This Week’s Top 10 News

1. Su Zhu, Co-founder of Three Arrows Capital, Arrested in Singapore

On September 29th, Su Zhu was arrested at Changi Airport in Singapore while attempting to leave the country. The joint liquidator Teneo stated that a detention order was issued against him by the Singapore court. The court order sentenced Mr. Zhu to 4 months of imprisonment. Kyle, another co-founder of 3AC, also received a similar detention order, effectively forcing him to cooperate with the liquidator’s investigation.

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According to @wassielawyer, a crypto lawyer, further investigation into Su Zhu’s arrest revealed that it was due to contempt of court – specifically, not cooperating with the liquidator and providing the requested information. It is somewhat surprising as contempt of court is rarely punished with such a long prison term and is typically fined. Comments suggest that there were multiple subpoenas, and the four-month sentence may be a cumulative result of multiple issues.

2. MicroStrategy Announces Purchase of 5,445 Bitcoins for $147 Million

On September 25th, MicroStrategy announced an additional purchase of 5,445 BTC for approximately $147.3 million, at an average price of $27,053. As of September 24th, 2023, MicroStrategy holds a total of 158,245 BTC, acquired at an aggregate cost of approximately $4.68 billion, with an average purchase price of $29,582.

3. U.S. SEC Hopes to Expedite Ethereum Futures ETF

On September 28th, according to Bloomberg ETF analyst Eric Balchunas, the U.S. Securities and Exchange Commission (SEC) hopes to accelerate the launch of an Ethereum futures ETF (as they want to free themselves from their work after the government shutdown); therefore, they have requested applicants to update their documents by Friday afternoon so they can start working on Monday and trade on Tuesday. “There are already over a dozen trying to directly Ethereum futures ETF, this will be a wild race,” Balchunas commented.

4. SEC Chairman States Cryptocurrency Intermediaries Must Comply with Securities Laws and Criticizes Cryptocurrencies

a. SEC Chairman Gary Gensler states that most cryptocurrency intermediaries must comply with securities laws

On September 27th, SEC Chairman Gary Gensler spoke at a hearing of the U.S. House Committee on Financial Services, stating in his prepared opening remarks: “Most cryptocurrencies probably meet the definition of an investment contract and thus are subject to the securities laws. So, most crypto tokens are subject to the securities laws, and therefore, most crypto platforms, too. Given the widespread non-compliance in the industry, we have taken a number of enforcement actions, some have settled, some are waiting to be resolved. Our updated proposal will cover the field comprehensively.”

b. SEC Chairman Gary Gensler strengthens criticism of cryptocurrencies during congressional hearing

On September 28th, SEC Chairman Gary Gensler continued to take a tough stance on the cryptocurrency industry at a congressional hearing. Gensler refused to answer specific questions about a Bitcoin spot ETF and criticized digital asset companies for their careless behavior in managing customer assets. He emphasized that mixed assets are a “formula that has not yielded good results.” Representative Lian Guaitrick McHenry (R-N.C.), chairman of the House panel, pointed out the SEC’s “losing record” in court and criticized its “crusade” against the digital asset ecosystem, which he believed was causing confusion and “long-term harm” to the industry. In response to Congressman Al Green’s question about whether there can be appropriate regulation for digital currencies, Gary Gensler stated that the dollar already exists in digital form and is quite robust, but cryptocurrency tokens are not currency because they do not fulfill the three basic functions of money: store of value, unit of account, and medium of exchange. Perhaps they may fulfill these functions in the future, but it will not happen in 2023.

5. Binance Weekly Updates

a. Binance announces complete withdrawal from Russia and sells its Russian business

On September 27th, Binance announced the sale of its Russian business to CommEX, completely withdrawing from Russia. Binance will work with CommEX to inform users how to migrate their assets to CommEX. As part of the registration process for new KYC users in Russia, they will be immediately redirected to CommEX, which will scale up over time. In the coming months, Binance will terminate all trading services and business lines in Russia.

CommEX is a newly established exchange with no information available about its employees or controlling individuals. According to its official website announcement, the exchange opened spot trading for BTC/USDT and ETH/USDT on July 25th and officially launched at 12:00 (UTC) on September 26th. As of September 27th, its Twitter account had only 255 followers, including CZ. CZ mentioned in a tweet that BNB holders will continue to enjoy a 25% trading fee discount on CommEX.

b. Binance reopens registration and access to products and services in Belgium

On September 26th, Binance tweeted that it has reopened registration and access to Binance products and services in Belgium. In June of this year, the Financial Services and Markets Authority (FSMA) of Belgium ordered Binance to cease operations and exit Belgium because Belgium does not allow Binance to provide services to individuals outside of the European Economic Area (EEA).

6. OKX releases the eleventh asset reserve proof

On September 26th, OKX released the eleventh asset reserve proof (snapshot date: 9-18). The user’s BTC assets amounted to 142,000 coins, an increase of 5.5% compared to the previous period (8-25), with an increase of 7,376 BTC. The user’s ETH assets amounted to 1.37 million coins, an increase of 41.8% compared to the previous period, with an increase of 404,000 ETH. The user’s USDT assets amounted to 493 million coins, a decrease of 1.6% compared to the previous period, with a decrease of 82 million USDT. OKX explained to Wu Shuo that the reason for the significant growth in ETH assets is that this period includes ETH 2.0 staking in the proof of reserves, which was not counted in previous periods.

7. Kraken plans to launch US stock and ETF trading in 2024

On September 28th, according to Bloomberg, cryptocurrency exchange Kraken plans to launch US stock and ETF trading services in 2024, marking its first foray into business outside the crypto field. According to an anonymous source, Kraken will initially offer the aforementioned trading through a new department called Kraken Securities in the US and UK. The company has obtained the necessary regulatory licenses in the UK and has applied for a broker-dealer license with the US Financial Industry Regulatory Authority.

8. JPMorgan Chase Bank to stop providing cryptocurrency-related payments for UK customers from October 16th

On September 26th, according to CoinDesk, JPMorgan Chase Bank, the second-largest private bank in the UK, will stop providing cryptocurrency-related payments for UK customers from October 16th. JPMorgan Chase Bank stated that the reason for the ban is “fraudsters more frequently using cryptocurrencies to steal large sums of money.”

On September 28th, Coinbase CEO Brian Armstrong criticized JPMorgan Chase Bank’s decision to prevent UK customers from engaging in cryptocurrency-related transactions, calling the decision “wrong”. Armstrong also urged UK cryptocurrency holders to consider closing their JPMorgan Chase Bank accounts and urged UK government officials, including Prime Minister Rishi Sunak and Chancellor of the Exchequer Andrew Griffith, to investigate whether JPMorgan’s actions align with the UK’s policy objectives.

9. HTX hot wallet attacked, losing $7.9 million

On September 25th, according to Cyver Alerts, suspicious transactions involving HTX were detected. Yesterday, an EOA address received 5,000 ETH worth $7.9 million from HTX’s hot wallet, and this morning it was discovered that HTX had migrated its hot wallet. Cyver has confirmed that one of HTX’s hot wallets was attacked, resulting in a loss of $7.9 million. HTX has communicated with the hacker address through Etherscan, confirming their true identity, requesting the return of the funds, and offering a 5% white hat bonus, valid until October 2nd, 2023; if not returned by the deadline, legal authorities will be involved.

Justin Sun stated that HTX has fully borne the losses caused by this hacking attack and successfully resolved the related issues. All user funds are protected by the Investor Protection Fund (SAFU), and the platform is operating normally. The $8 million (5,000 ETH) is a relatively small amount compared to the $3 billion in assets, equivalent to two weeks’ revenue for the HTX platform.

10. Mixin Network cloud service provider’s database attacked, involving approximately $200 million

According to SlowMist, on September 23rd, Mixin Network’s cloud service provider’s database was attacked, involving approximately $200 million. Mixin Network announced the suspension of deposit and withdrawal services. Mixin’s founder, Cedric Fung, stated in a video that the stolen assets mainly consisted of Bitcoin, and there was no serious theft of assets such as BOX and XIN; for the stolen assets, a maximum of 50% compensation will be provided, and the remaining portion will be compensated in the form of bond tokens. Jiang Zhuo’er questioned the claim that Mixin was hacked for $200 million, stating that BTC in the BOX should normally be stored in a cold wallet.

On September 27th, Mixin founder Feng Xiaodong announced the preliminary plan for the recovery of user wallet assets in Mixin Messenger, stating that the situation of the damaged assets has been basically clarified. The expected compensation ratios for BTC, ETH, and ERC-20 USDT are 90%, 30%, and 10% respectively. Other versions of USDT are unaffected. Feng Xiaodong stated that the announcement of the formal compensation plan will take time, but the change in the compensation ratios will not exceed 1%. In addition, other currencies have suffered losses to varying degrees, and the team is prepared to use existing funds and borrow money to fully compensate for the corresponding assets. Feng Xiaodong said that the Mixin team is currently working hard to convert the stolen coins on the day of the theft into US dollars to compensate the affected users, with priority given to compensating the victims of ERC-20 USDT.

Key Financing Events

• Oracle project Supra announced the completion of over $24 million in financing;

• Ethereum browser Rated Labs raised $12.888 million in Series A financing led by Archetype;

• AnchorWatch announced the completion of $3 million in financing led by Ten31;

• Blockchain Fhenix, driven by homomorphic encryption technology, completed a $7 million seed round of financing;

• Avantis Labs completed a $4 million seed round of financing led by LianGuaintera Capital;

• Pimlico announced the completion of a $1.6 million seed round of financing led by 1confirmation;

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

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