Wu’s Weekly Picks: HSBC launches cryptocurrency ETF, US SEC rejects spot ETF application, Azuki criticized by community, and top 10 news (June 24-30)

Wu's Weekly Picks: HSBC launches crypto ETF, SEC rejects spot ETF, Azuki faces community criticism, top 10 news (June 24-30)

Author | Wu Talks Blockchain

This week’s Top 10 news

0. US SEC returns physical ETF application files

According to WSJ, the US Securities and Exchange Commission said that the physical Bitcoin ETF filing is insufficient, and the regulatory agency told Nasdaq and the Chicago Options Exchange that the recent filings from companies such as BlackRock and Fidelity were not clear and comprehensive. The SEC returned these filings because they did not disclose the names of the spot Bitcoin exchanges expected to sign the “monitoring sharing agreement” or provide sufficient information about these monitoring arrangements.

• US SEC: Applications for Bitcoin spot ETFs submitted by companies such as BlackRock and Fidelity are insufficient.
• Three days after listing, trading volume is lackluster. The first-ever leveraged BTC ETF in the US did not have a good start.
• Everyone asks Vitalik: BCH culture has made progress, MPC wallet has fundamental flaws, and the farthest distance traveled on foot is 113 kilometers.

Fidelity Investments led several companies to submit a series of new physical Bitcoin ETF applications, including Invesco, VanEck, 21Shares, and WisdomTree. All five companies that resubmitted on Friday said that Coinbase Global Inc. will provide market surveillance to support its funds, a fact that was not included in previous versions.

1. Michael Saylor announces that MicroStrategy has bought 12,333 more Bitcoins

On June 28th, Michael Saylor announced that MicroStrategy has bought 12,333 more Bitcoins at an average price of $28,136, spending about $347 million. As of June 27th, MicroStrategy holds a total of 152,333 Bitcoins at an average purchase price of $29,668, spending about $4.52 billion.

2. Biden says he will eliminate tax loopholes for cryptocurrency traders and hedge fund managers

US President Biden mentioned in a speech on Bidenomics on the 28th that “we will make tax policy fairer by eliminating loopholes for cryptocurrency traders and hedge fund managers.”

Previously, the US National Bureau of Economic Research released a paper stating that cryptocurrency traders use the sharp price fluctuations to “harvest” losses to offset other profits, thus avoiding billions of dollars in taxes.

3. The first in Hong Kong: HSBC Bank allows customers to buy and sell cryptocurrency ETFs

Wu Talks Blockchain exclusively learned that HSBC, Hong Kong’s largest bank, will allow its customers to buy and sell virtual asset ETFs listed on the Hong Kong Stock Exchange starting today. This is also the first bank in Hong Kong to allow customers to buy and sell virtual asset ETFs listed on the Hong Kong Stock Exchange. This move will expand the exposure of local users to cryptocurrency. Currently, the cryptocurrency ETFs listed in Hong Kong include Southbound Dongying Bitcoin Futures ETF, Southbound Dongying Ethereum Futures ETF, and Samsung Bitcoin Futures Active ETF.

HSBC has launched a virtual asset investor education center. Users need to read and confirm the educational materials and risk disclosures in the virtual asset investor education center before investing in any virtual asset-related products through the Hong Kong HSBC Easy Investment application, HSBC Mobile Wealth Management application, or online banking.

4. Azuki Weekly Roundup

a. Azuki announced the launch of Azuki Elementals, and then its floor price collapsed

On June 24, Azuki tweeted that it would launch Azuki Elementals, with a total of 20,000. Each Azuki holder and BEANZ holder will receive a Soulbound Token (SBT) airdrop. All Azuki and BEANZ holders can participate in the presale at 00:00 on June 28th. In addition, each Azuki holder will receive an undisclosed, locked Elemental.

On the same day, the Azuki floor price collapsed from 17.5 ETH to 14.11 ETH, a drop of more than 13% based on the stable price of 15.1 ETH on June 24th.

b. After the launch of Azuki Elementals, the Azuki floor price collapsed again

On June 28, after the launch of Azuki Elementals, based on data from the morning of June 28th, Azuki fell by 28% in 24 hours, Beanz fell by 42%, and Azuki Elementals (1.58 ETH) and Azuki Elemental Beans (1.9 ETH) were sold at prices below 2 ETH. The low degree of identification between Azuki Elementals and the first generation of Azuki caused user dissatisfaction and was the main reason for the sell-off. Some community users accused that Elementals was another form of issuance of the first-generation Azuki, diluting the value of the first-generation Azuki.

According to 0xScope data, through the sale of Azuki Elementals, the Azuki team (0x3A…6305) received 20,000 ETH, worth about 37 million U.S. dollars, which was then transferred to the Azuki team’s multi-signature address (0x2a…60AA). The largest individual purchases include luggis.eth ($1.53 million), christian2022.eth ($1.39 million), beanwhale.eth ($1.09 million), and suicide.eth ($510,000), etc.

As of press time (June 30), the Azuki floor price was 8.85 ETH, a 48% drop during the week, the Azuki Elementals floor price was 1.38 ETH, a 31% break, and the Azuki Elemental Beans floor price was 1.86 ETH.

c. Co-founder of Azuki: The existence of the same metadata in Azuki Elementals NFT is a technical error

On June 28th, in response to community concerns about duplicate metadata/images for Azuki Elementals NFTs, Azuki co-founder 2PMFLOW.ETH stated that this was a technical error caused by outdated event logs from a data provider, resulting in some NFTs having incorrect metadata. The team is currently restoring the correct images and metadata. It has been discovered that NFTs with the same images include 2210 & 10744, 1077 & 8600, 16046 & 8914, 16580 & 5613, and 19697 & 2475, among others.

Founder of SlowMist, Cosmos, stated that some images of Azuki Elementals have defects, and contract owners can replace previous NFT images by entering a new image library link in “setBaseURI(0x55f804b3)” of the Elementals contract. In addition, the current image library link path for Azuki Elementals comes from a centralized server and can be directly replaced, while Azuki’s image library link path comes from IPFS.

On June 28th, according to on-chain data, Azuki Elementals and Azuki Elemental Beans deployer (0x48…5f88) deployed an ERC-1155 Token named GreenBean at 16:51, and airdropped 881 GreenBeans to 400 Azuki holders at 17:35. KOL @0xWave decompiled the contract and pointed out that the GreenBean contract is a hard-coded reference to the Azuki main contract with a maximum supply of 10,000, and royalties can be referenced for trading.

Azuki responded to the Elementals controversy and stated that the goal of Elementals is to develop a garden, welcome new members to expand the Azuki universe, and create new types of animations. Elementals will be related to the four elements of water, fire, electricity, and earth, and have unique characteristics; the garden will also have new members: animals and children. Currently, almost all clothing, hand items, and other features are being adjusted to fit adults, children, and animals. In addition, Azuki also displayed the image of GreenBean. Currently, on-chain data shows that 8.8k airdrops have been completed by the deployer of Elementals’ GreenBean contract.

Azuki transferred 20,000 ETH (approximately US$37 million) obtained through Elementals sales to Coinbase Prime at 2:28 am on June 29th (Coinbase’s institutional trading/custody platform).

5. FTX Weekly Update

a. FTX misappropriated customer assets of approximately $8.7 billion when it filed for bankruptcy last year

On June 27, according to Bloomberg, FTX’s new management stated in a report on Monday that it has recovered approximately $7 billion in liquid assets to date. When FTX filed for bankruptcy last year, it misappropriated customer assets of approximately $8.7 billion, but the total liabilities still exceed $15 billion. In addition, the new management accused the old FTX group of making “false statements” to banks about mixed customer funds accounts and dismissed an employee who expressed concern about this practice.

According to FTX’s hearing documents on April 12, the $7.3 billion includes $4.3 billion in Class A cryptographic assets, $2 billion in cash, $600 million in investment receivables, and $500 million in securities. Class A cryptographic assets refer to tokens with a market value of at least $15 million and a daily trading volume of at least $1 million in the past 30 days, but the specific token names are not specified. $7.3 billion is the recoverable assets available to stakeholders, which is less than the total liabilities of about $15 billion.

b. FTX’s current CEO: Has started to solicit interested parties to restart the FTX.com exchange

On June 28, according to The Wall Street Journal, FTX’s current CEO, John J. Ray III, stated that the company “has started to solicit interested parties to restart the FTX.com exchange.” Sources said that FTX has been in early talks with investors to discuss the possible restart of the FTX.com exchange supported by structures such as joint ventures. As part of any restart, FTX may be renamed; the negotiations include the possibility of compensating some existing customers by offering them shares in any reorganized entity. Blockchain technology company Figure has expressed interest in helping to restart FTX.

John J. Ray III stated as early as January of this year that he was studying the possibility of restarting FTX, and in May court documents, he revealed some plans for FTX 2.0, including reviewing the next summary, reviewing and completing exchange 2.0 restart materials for distribution, etc. However, Anthony Scaramucci and others have expressed negative views on restarting FTX, pointing out that any restart of the exchange requires the support of creditors and bankruptcy judges.

6. Coinbase Weekly Update

a. Coinbase responds to SEC lawsuit: Listed cryptocurrencies are not securities and are not under SEC jurisdiction

In its response filed on June 29, Coinbase addressed the lawsuit previously brought against it by the SEC, stating that the cryptocurrencies listed by the SEC are not investment contracts and therefore not securities, and are not under its jurisdiction. Coinbase also stated that its due process rights were violated when the SEC brought the lawsuit, and that the lawsuit may violate the principle of “materiality.”

b. The US Securities and Exchange Commission (SEC) will respond to Coinbase’s first legal defense on July 13

On June 30, pursuant to a court order, the US Securities and Exchange Commission (SEC) will respond to Coinbase’s first legal defense on July 13. Due to Coinbase’s “creative” defense strategy, the hearing date is much earlier than expected. Coinbase submitted a response to the SEC lawsuit that included several defenses before the deadline of August 7, claiming that the action violated due process and constituted an abuse of discretion.

7. Binance Weekly Recap

a. Belgium orders Binance to cease offering exchanges between virtual and fiat currencies

On June 24, the Belgian FSMA ordered Binance to immediately cease offering any and all exchanges between virtual and fiat currencies in Belgium. The Brussels public prosecutor has been informed that such conduct may constitute a criminal offense.

b. Binance reverses decision to delist multiple privacy coins in Europe

On June 26, Binance reversed its decision to delist multiple privacy coins in Europe, stating that it had adjusted its operations to comply with EU standards after careful consideration of feedback from the community and several projects, but did not disclose which privacy coins were ultimately delisted. Previously, Binance planned to delist 12 privacy coins, including XMR and ZEC, in France, Italy, Spain, and Poland starting on June 26.

c. German regulatory agency BaFin rejects Binance’s cryptocurrency custody license application

On June 29, according to a report by FinanceFWD, the German financial regulatory agency (BaFin) made an internal decision not to grant Binance a cryptocurrency custody license. Without the license, the company cannot advertise.

d. Binance has withdrawn its license application to Austrian authorities

On June 27th, according to FinanceFWD, Binance has withdrawn its license application to Austrian authorities. A Binance spokesperson responded that they cannot share details of conversations with regulators and that their current focus in Europe is to ensure full compliance with the EU’s MiCA requirements when it is implemented at the end of next year. Binance has recently exited the Netherlands and cancelled license applications in Cyprus and the UK, but still has registrations in EU countries such as Italy, Spain, and France.

8. OKEx Weekly Summary

a. OKEx plans to suspend services to Japanese residents, possibly due to regulatory pressure from the Japanese FSA

On June 27th, according to Coinpost, cryptocurrency exchange OKEx plans to suspend services to Japanese residents. The exchange’s application shows “You cannot use OKEx Exchange products due to local laws in Japan.” This may be due to regulatory pressure from the Japanese FSA. Earlier, Binance announced that its global services would stop providing services to Japanese residents on November 30, 2023. Binance plans to launch a local platform in Japan in the summer of 2023.

b. OKEx releases its eighth reserve proof

On June 28th, OKEx released its eighth reserve proof (snapshot date 6-23), with a total value of $11.3 billion. User BTC asset precipitation increased by 10.8% compared to the previous snapshot (5-19), with an increase of 14,795 BTC; user ETH asset precipitation decreased by 6.7%, with a decrease of 75,800 ETH; user USDT asset precipitation increased by 10.4%, with an increase of 464 million USDT.

9. DeFi Road announces suspension of cryptocurrency-related news, and 8btc will focus on AI track

On June 25th, DeFi Road, a subsidiary of 8btc, announced that it will suspend the publication of cryptocurrency-related news and the acceptance of cryptocurrency content submissions. 8btc will focus on AI tracks, covering Web3 and other content. As one of the earliest Chinese cryptocurrency communities and media, 8btc announced the completion of a RMB 100 million Series A financing in 2018, led by PwC Capital and Pantheon Capital, with Sequoia Capital China and Bitmain following.

10. Nevada regulators have applied to take over Prime Trust

The Federal Department of Financial Institutions (FDI) in Nevada announced on June 27th that it has applied to the court to take over the daily operations of the encrypted custody institution Prime Trust and is seeking a receiver to take over. The board of directors of Prime Trust has agreed to the takeover. According to the documents, Prime Trust owes customers more than $85 million in fiat currency and $69 million in digital currency, but currently only has nearly $3 million in fiat currency and $68 million in digital assets. In addition, the FDI said that Prime Trust had lost access to its old wallet as early as 2021.

Coinbase product manager Conor Grogan tweeted that according to Arkham data, Prime Trust’s wallet holds a total of $69.71 million in digital assets, of which the amount of AUDIO held is $61.51 million, accounting for 88% of its digital currency assets.

Key Financing Events

• NFT trading platform Tegro announced the completion of seed round financing with a valuation of $100 million

• Web3 chain game project Delysium announced that it has received strategic investment from Polygon

• Web3 game studio Pixion Games completed a $5.5 million seed round financing

• Web3 game studio Mythical Games completed a $37 million C1 round financing

• Web3 wallet platform Galaxy Finance announced the completion of a $30 million Series B financing

• DWF Labs has invested $18 million in Conflux again

• Startale Labs announced that it has received a $3.5 million investment from Sony

• The developer of CryptoQuant, Team Blackbird, has completed an 8.5 billion won A round of financing

• Web3 data security and privacy platform Mind Network announced the completion of a $2.5 million seed round of financing

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

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