Wu’s Weekly Selection Tornado Cash Co-founder Arrested, HashKey to Open Retail Investors Next Week, and Top 10 News (0819-0825)

Wu's Weekly Selection Tornado Cash Co-founder Arrested, HashKey to Open Retail Investors Next Week, and Top 10 News (0819-0825)

Author | Wu Talks Blockchain

Top 10 News of the Week

1. US government arrests co-founder of Tornado Cash and adds him to sanctions list

The US Department of the Treasury announced a new SDN sanctions list on August 23, including Roman Semenov, co-founder of TornadoCash. The announcement states that he is a Russian national, previously residing in Dubai, and lists his 8 Ethereum addresses. The US Department of Justice has filed charges against Roman Semenov and the second co-founder of Tornado Cash, Roman Storm, who was arrested today by the FBI and IRS. They are accused of conspiring to launder money, operate an unlicensed money transmission business, and violate sanction regulations.

• Market Analysis There will be a sharp decline before the next rise, a bear market is approaching.
• The former secretary of the Fuzhou Municipal Party Committee, who supported mining, has been sentenced to life imprisonment, but it has also left us with many questions.
• The first debate of the Republican primary ended. Which candidates are friendly to cryptocurrencies?

2. China’s Court Network releases “Qualification of Illegal Acquisition of Virtual Currency”

On August 24, China’s Court Network released the “Qualification of Illegal Acquisition of Virtual Currency”, which states that there are three viewpoints regarding the criminal qualification of illegal acquisition of virtual currency: qualifying it as a crime of illegally obtaining computer information system data; considering it as a theft crime; and the possibility of violating two charges, with the option to choose one heavier charge. The legal qualification of illegally acquiring virtual currency depends on the time of the behavior. If it occurred before September 2017, virtual currency is considered property in the sense of criminal law and may constitute theft and illegal acquisition of computer information crimes, with the option to choose one heavier charge. If it occurred after September 2017, virtual currency is no longer considered property under criminal law and is not subject to criminal regulations related to property crimes.

3. Summary of Compliance Exchanges in Hong Kong

a. HashKey to open retail trading on August 28th (next Monday)

According to Sing Tao Daily on August 21, HashKey will open retail trading on August 28th (next Monday). Initially, retail investors can invest in Bitcoin and Ether, with a restriction that investments in virtual assets cannot exceed 30% of total assets. In the future, when regulatory approval is obtained, they will also introduce various derivative products to different types of users. It will initially support USD trading and does not yet support HKD. It currently only accepts bank card transactions and does not support credit cards. HashKey has also partnered with 4 to 5 securities firms in the market to provide buying and selling services for customers to access the platform.

b. The third approved HKVAX in Hong Kong expects to launch the platform, OTC over-the-counter trading, and other services in half a year

According to Ming Pao on August 21, HKVAX, the third entity to receive a principle-based regulatory license in Hong Kong, stated that it expects to launch the platform, OTC over-the-counter trading, and other services in half a year. It is actively advancing the next round of financing, introducing different institutions including brokerages, buyer asset management, and investment banks. It will also discuss with licensed platforms in foreign countries to arrange STO listings and subscriptions for interested investors in major markets around the world.

4. FTX Weekly Updates

a. FTX plans to sell over $3 billion in crypto assets through Galaxy

On August 24th, according to Coindesk, legal documents show that FTX plans to sell, pledge, and hedge its large amount of cryptocurrency assets, returning funds to creditors in fiat currency instead of Bitcoin or Ethereum. FTX is seeking to cautiously trade to avoid devaluation of its over $3 billion crypto assets, and therefore seeks assistance from Galaxy Digital CEO Mike Novogratz as an advisor.

b. FTX’s monthly legal expenses reach nearly $50 million

On August 24th, lawyer Kris Hansen, representing the FTX Creditors Committee, stated that FTX’s monthly legal expenses have reached nearly $50 million, with daily expenses averaging $1.5 million. Hundreds of lawyers, financial advisors, and bankers are working almost full-time, and every dollar spent on legal fees reduces the amount available to repay creditors.

c. FTX: Bankruptcy claims agent Kroll attacked, some non-sensitive customer data leaked

On August 25th, FTX announced that bankruptcy claims agent Kroll experienced a cybersecurity incident, resulting in the leakage of non-sensitive customer data for certain claimants in pending bankruptcy cases. Please remain highly vigilant against fraudulent attempts and phishing emails impersonating bankruptcy parties. Earlier, the FTX victim community also reported receiving phishing emails with the subject “Withdrawals are available.” BlockFi tweeted that the attack on bankruptcy claims agent Kroll led to the leakage of some customer data, but BlockFi’s internal systems and customer funds were not affected.

5. Binance Weekly Updates

a. US Department of Justice investigates whether Binance may have violated US sanctions against Russia

On August 23rd, according to The Wall Street Journal, the US Department of Justice is investigating whether Binance may have violated US sanctions against Russia by offering at least five sanctioned Russian banks as options for payment processing to Russian customers. Binance responded by stating that it follows global sanction rules, imposing sanctions on individuals, organizations, entities, and countries blacklisted by the international community, and refusing access to the Binance platform for such actors.

b. Binance announces a seminar held in cooperation with the New Taipei District Prosecutor’s Office in Taiwan

Binance announced on August 24th that it held a seminar in cooperation with the New Taipei District Prosecutor’s Office in Taiwan, sharing professional insights on investigations in the field of virtual assets with more than 70 prosecutors, with a focus on combating cybercrime in the virtual asset field. This seminar is the second joint event held by Binance and Taiwanese law enforcement agencies this summer, following a similar training course organized by Binance for the Taiwan Criminal Investigation Bureau in June.

6. Coinbase Weekly Update

a. Coinbase: Invests in Circle, to Share USDC Reserve Interest Income

On August 22nd, according to the official Coinbase blog, USDC will be launched on 6 new blockchains between September and October, increasing multi-chain access to 15. Coinbase will increase its support for stablecoins and has invested in Circle. Circle will have full control over the issuance and governance of USDC, while Coinbase will acquire equity in Circle. Both parties will continue to benefit from the interest income of the USDC reserve and jointly promote global adoption of USDC.

b. Coinbase in Negotiations with Canadian Banking Giants to Drive Crypto Ecosystem Development

On August 25th, according to Coindesk, cryptocurrency exchange Coinbase is in negotiations with Canadian banking giants to persuade them to support the country’s crypto ecosystem. Lucas Matheson, Coinbase’s Director of Canadian Operations, stated that he has been in talks with Canada’s tier-one banks. Additionally, Coinbase recently received pre-registration undertakings (PRUs) in Canada, committing to meet specific regulatory requirements by certain dates.

7. Bitstamp to Halt Ethereum Staking Services for US Customers on September 25th

On August 24th, according to Blockworks, cryptocurrency exchange Bitstamp will stop offering Ethereum staking services to US customers starting from September 25th. Bobby Zagotta, CEO of Bitstamp US, stated in a statement that until September 25th, 2023, customers will continue to receive staking rewards. After that date, all staked assets will be unstaked, and the rewards will be credited to users’ main account balances along with the principal. This process may take several days and may be extended based on network conditions. Other Bitstamp services will not be affected.

8. Israeli Police Accuse Israeli Crypto Giant Moshe Hogeg of $290 Million Cryptocurrency Fraud

On August 23rd, according to Bloomberg, Israeli police have accused Israeli crypto giant Moshe Hogeg and his partners of defrauding investors of $290 million through cryptocurrency scams. In a statement on Wednesday, Israeli police said that after a two-year investigation, Moshe Hogeg has been charged with fraud, theft, money laundering, forgery, and tax offenses. Israeli police have submitted recommendations to the prosecutor, who will decide whether to press charges and review the evidence of sexual crimes. It is reported that Hogeg and several partners (whose identities are not disclosed in the document) are accused of using millions of dollars raised from Israeli and foreign investors in 2017 and 2018 for personal use and for four cryptocurrency startups.

9. SEC Accuses Titan Global of Cryptocurrency-Related Violations

On August 22nd, the SEC announced charges against FinTech investment advisor Titan Global Capital. Titan is accused of using misleading hypothetical performance metrics in its advertisements, including claiming an annualized return of up to 2700% for the Titan Crypto strategy, and failing to adopt policies regarding employee cryptocurrency trading. Titan has agreed to cease and desist and to pay disgorgement of $192,454 in ill-gotten gains, prejudgment interest, and a civil penalty of $850,000.

10. NFT Startup Recur, which Raised $55 Million, Announces Closure

On August 21st, Recur, an NFT startup that raised $55 million, announced that it is gradually phasing out its Web3 platform functionality and will completely shut down on November 16th, 2023. All NFT metadata on the platform will be migrated to IPFS. Recur, valued at $333 million in 2021, completed a $50 million Series A funding round led by Digital with the aim of creating NFT-based in-game assets, loyalty programs, and digital collectibles.

Key Funding Events

• Cryptocurrency exchange BitOasis completes new funding round

• LuminaDEX completes strategic funding with participation from Jump Crypto and others

• Web3 game developer Hungri Games completes $1.9 million seed funding round led by Bogazici Ventures

• Open-source tool Anytype completes $13.4 million funding round led by Balderton Capital

• Binance Labs announces investment in DeFi yield protocol Pendle Finance

• Binance Labs announces investment in zkWASM infrastructure provider Delphinus Lab

• Ideogram AI completes $16.5 million seed funding round led by a16z and Index Ventures

• Financial technology company Ramp completes $300 million funding

• Clean mining company Nodal Power completes $13 million seed funding round

• Lending protocol Maple Finance completes $5 million funding

• Momentum Capital secures $10 million investment from Canadian BM Fund

For more industry funding events, please refer to crypto-fundraising.info.

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