Weekly News Highlights | Binance Establishes Industry Recovery Fund; Multicoin Capital's Assets May Drop 55% Due to FTX Bankruptcy

整理：润升，ChainCatcher

Important News

1. Binance is establishing an industry recovery fund, and Sun Yuchen stated that Tron DAO, Huobi, and Poloniex will participate in the fund

On November 14, Binance founder Zhao Changpeng tweeted, "To mitigate the further cascading negative impacts of FTX, Binance is establishing an industry recovery fund to assist projects that are strong in other aspects but facing liquidity crises. More details will be released soon. If you believe you qualify, please contact Binance Labs, and we also welcome collaboration from other industry participants with cash." Subsequently, Sun Yuchen stated that Tron DAO, Huobi, and Poloniex will participate in the fund.

Additionally, according to a previous report by Bloomberg, Zhao Changpeng indicated that after the bankruptcy of competitor FTX, the company plans to lead the development of global standards in collaboration with other industry participants. (Source link)

2. Gate.io responds to doubts about Ethereum wallet assets being only $479 million and the 2018 hacking incident

On November 15, on-chain analyst Lookonchain stated on social media that on-chain detective ZachXBT revealed that the cryptocurrency exchange Gate.io was hacked by North Korean hackers on April 21, 2018, resulting in a theft of $230 million, which has not been disclosed to customers. On-chain data shows that the first transaction from Gate.io's hot wallet also occurred on April 21, 2018, indicating that Gate.io concealed the fact that funds were stolen.

Furthermore, Lookonchain also stated that by analyzing four wallets on Ethereum, it found that Gate.io only has $479 million in assets. Gate.io holds 71.3651 million GT and 3,139,008,926,439 SHIB, which together account for 61% of total assets. Gate.io only holds 53,930 ETH and 31.98 million USDT, which together account for only 21% of total assets.

Subsequently, Gate.io issued a statement in response: the claim that Gate.io only has 53,930 ETH is false information. For example, one of the addresses held by Gate.io, 0xC882b111A75C0c657fC507C04FbFcD2cC984F071, stores 140,000 ETH, along with $200 million in tokens, bringing the total audited amount of ETH to 269,035 ETH. Regarding the hacking incident, Gate.io stated that according to investigations by relevant U.S. authorities, several well-known platforms were hacked in 2018, but Gate.io's users did not suffer any losses in this attack. (Source link)

3. Messari analyst: FTX depositors are expected to recover 40-50% of their assets

On November 16, Messari analyst Kunal Goel wrote that after studying FTX's "balance sheet," he found that FTX may currently have up to $4 billion in liquid assets, while customer deposits amount to $8 billion. This means that depositors are expected to recover 40-50% of their assets. (Source link)

4. Huobi announces 17 new senior department heads, reporting to advisors like Justin Sun

On November 16, according to reports from Wu Blockchain, an internal email from Huobi showed that the Huobi Advisory Committee has made adjustments to the company's organization, with nearly all department heads being replaced. All newly appointed department heads report to the global advisory committee represented by Justin Sun.

It is reported that some of the new leaders are former employees of TRON. The departments defined by Huobi include: spot, contracts, fiat, assets, DEX, NFT, liquidity, PR, finance, securities, risk control, auditing, international, procurement, HR, and GR.

Previously, former Huobi CEO Zhu Hua has officially left, and former Huobi PR/GR head Chen Dai also bid farewell to Huobi on social media. On November 4, former Huobi CFO Zhang Li left. Sun Yuchen's team has now fully taken over Huobi's operations. (Source link)

5. The Wall Street Journal: BlockFi plans to file for bankruptcy protection
On November 16, according to reports from The Wall Street Journal citing informed sources, crypto lending company BlockFi is currently preparing to lay off employees and may plan to file for bankruptcy protection due to the impact of the FTX incident. Previously, BlockFi announced significant risk exposure to FTX and related companies, suspended withdrawal services, and hired external expert consultants to make further arrangements. (The Wall Street Journal)

6. Temasek: Invested approximately $275 million in FTX and FTX US, which took 8 months of due diligence showing FTX was profitable

On November 17, Temasek released a statement regarding FTX, stating that from October 2021 to January 2022, in two rounds of financing, Temasek invested $210 million to purchase about 1% minority equity in FTX International and invested $65 million to purchase about 1.5% minority equity in FTX US. As of March 31, 2022, the investment cost of FTX accounted for 0.09% of our portfolio net value of SGD 403 billion. Given FTX's financial situation, Temasek decided to write down its entire investment in FTX, regardless of the outcome of FTX's bankruptcy protection application.

In terms of due diligence on FTX, it took about 8 months from February to October 2021 to review FTX's audited financial statements, which showed it was profitable; additionally, it focused on regulatory risks associated with cryptocurrency financial market service providers; qualitative feedback on the company and management team was also collected. After the investment, Temasek continued to manage business strategy and performance monitoring. However, eliminating all risks is not practically feasible.

From this investment, it is evident that "our faith in Sam Bankman-Fried's actions, judgment, and leadership seems to have been misplaced." (Source link)

7. Sources: Multicoin Capital's assets fell by 55% due to the FTX bankruptcy incident

On November 17, according to Blockworks citing sources, the crypto investment firm Multicoin Capital lost more than half of its flagship fund's capital in about two weeks. Three sources stated that due to the FTX bankruptcy incident, Multicoin's assets fell by 55% in about two weeks. In addition to 9.7% of assets being held by FTX, losses were also due to its long-term bullish position on Solana and Solana ecosystem assets, such as Mango, holding equity in FTX.US, and unfinished derivative contracts.

Furthermore, Multicoin has no plans to shut down its flagship product or switch to proprietary trading and is also working on operational and infrastructure improvements, including efforts to reduce counterparty risk. In response, a Multicoin spokesperson declined to comment. (Source link)

8. Genesis is seeking a $1 billion emergency loan from investors

On November 18, according to The Wall Street Journal, crypto trading and lending firm Genesis was seeking a $1 billion emergency loan from investors before suspending redemptions this week, citing liquidity constraints due to certain illiquid assets on its balance sheet.

Genesis's interim CEO Derar Islim stated during a conference call on Wednesday that its cryptocurrency lending division, Genesis Global Capital, has suspended redemptions and new loan issuance. Derar Islim indicated that Genesis is looking for solutions for its lending division, including seeking new sources of liquidity. He stated that Genesis's trading and custody businesses are still operating normally. (Source link)

9. Public chain Sui launches an operator-focused testnet and emphasizes no testnet rewards will be provided

On November 18, the public chain Sui announced the launch of Testnet Wave 1, which focuses on operators, particularly validators and full node operators. The official stated that this testnet will run for about two to three weeks and will be shut down once its goals are achieved. This is the first instance of Sui Network collaborating with non-Mysten Labs operators and an important step towards a decentralized Sui mainnet.

It is reported that the most significant advancement from Devnet (Developer Network) to Testnet Wave 1 is the inclusion of independent validators. Under Devnet, Mysten Labs operated four validators to verify transactions on the network, while Testnet Wave 1 includes 20 third-party validators selected from the application process and over 500 full nodes jointly operated by Mysten Labs and selected community members. The official emphasized that there is currently no SUI airdrop plan, and interacting with the testnet will not provide any rewards. (Source link)

10. The Wall Street Journal: SBF sold personal shares for $300 million during FTX's previous $420 million B-1 round financing

On November 19, according to The Wall Street Journal citing FTX financial report reviewers and informed sources, former FTX CEO SBF sold personal shares for $300 million during FTX's $420 million B-1 round financing completed last year in October. SBF told investors at that time that this portion was to offset the money spent on purchasing FTX shares held by Binance a few months earlier. It is currently unknown what SBF did with this $300 million. According to FTX's 2021 financial statements, this amount was held by the company on behalf of "related parties" for "operational contingencies."

ChainCatcher previously reported that Binance was the first investor in the FTX platform, but SBF repurchased all (15% of the total) FTX shares from Binance in July 2021. FTX had previously announced the completion of over $420 million in B-1 round financing in October 2021, with participation from BlackRock, Tiger Global, Ontario Teachers' Pension Plan, Temasek, Sequoia Capital, and others. (Source link)

11. Vitalik: Using ZK-SNARK technology to improve CEX asset proof, future "restricted" CEX may emerge

On November 19, Vitalik published a new article titled "Having a Secure CEX: Proving Solvency and More," exploring the historical attempts of trading platforms to provide decentralized asset proof, technical limitations, and how to use ZK-SNARK and other advanced technologies to greatly simplify and improve the privacy issues and robustness in the current Merkle tree asset proof protocol. Additionally, Vitalik discussed how to completely prevent trading platforms from stealing users' funds using technologies like Plasma and validiums.

At the end of the article, Vitalik stated, "In the future, we may see crypto 'restricted' CEXs, where user funds are stored in smart contracts similar to validium. We may also see semi-custodial trading platforms where we entrust fiat currency rather than cryptocurrency to them."

Previously, ChainCatcher reported on November 14 that Zhao Changpeng stated he would collaborate with Vitalik to launch a new method for proving platform reserves, with Binance as the pilot. (Source link)

Important Financing/Venture Capital News

1. Metaverse UGC platform YAHAHA completes $40 million A+ round financing, led by Temasek and Alibaba

On November 15, the metaverse UGC platform YAHAHA announced the completion of $40 million in A+ round financing, jointly led by Temasek and Alibaba, with participation from 37 Interactive Entertainment, and Taihe Capital serving as the exclusive financial advisor. The funds from this round will be used for product iteration, community ecosystem building, and personnel expansion.

It is reported that YAHAHA was established in 2020, aiming to democratize 3D content creation and consumption. Its 3D content creation tools will help any creative individuals build their own games, worlds, and social spaces, allowing creators to create a game in a no-code manner through simple drag-and-drop. YAHAHA released the Alpha test version of its product in April 2022. (Source link)

2. Blockchain SaaS lending solution provider Lentra completes $60 million B round financing, led by BVP and SIG

On November 16, according to FintechFutures, blockchain, AI, and machine learning-based SaaS lending solution provider Lentra announced the completion of $60 million in B round financing, led by existing investors Bessemer Venture Partners and Susquehanna International Group (SIG) Venture Capital, with participation from Citi Ventures.

It is reported that the company will use this funding to expand its business into five countries, including the United States, Vietnam, and the Philippines. (Source link)

3. Singapore-based blockchain securities exchange ADDX completes $20 million financing, led by KB Securities

On November 16, according to Forbes, Singapore-based blockchain securities exchange ADDX completed $20 million in financing, led by KB Securities, the brokerage arm of South Korea's KB Financial Group.

This round of financing is a continuation of the $58 million completed in May, with participation from UOB, Hamilton Lane, the Thailand Stock Exchange, and the venture capital arm of Thailand's Kasikornbank. The funds will be used to develop its recently launched institutional wealth management platform, and ADDX will also collaborate with KB Securities to expand its private investment services in Asia.

Previously, ADDX announced in June that it recognized cryptocurrencies, including Bitcoin, Ethereum, and USDC, in its assessment of qualified investors. (Source link)

4. zkSync developer Matter Labs completes $200 million C round financing, led by Blockchain Capital and Dragonfly

On November 16, zkSync developer Matter Labs completed $200 million in C round financing, led by Blockchain Capital and Dragonfly, with participation from LightSpeed Venture Partners, Variant, and a16z.

It is reported that Matter Labs did not disclose its valuation, and the total financing amount reached $458 million. Additionally, Matter Labs committed to submitting its core software under the MIT open-source license by the end of 2022, which means third parties will be allowed to view, use, and enhance the zkSync code. (Source link)

5. Forbes: BitGo plans to raise new funds at a $1.2 billion valuation

On November 16, according to sources, cryptocurrency custody company BitGo is in preliminary discussions to raise new funds at a $1.2 billion valuation. BitGo claims it has no risk exposure to FTX, Alameda, or companies like Three Arrows Capital and Celsius.

ChainCatcher previously reported that Galaxy Digital announced in April this year that it would terminate its acquisition of BitGo, and BitGo stated in August that it planned to sue Galaxy Digital and seek $100 million in damages. (Forbes)

6. Blockchain startup Circularise completes €11 million financing, led by Brightlands Venture Partners

On November 17, Dutch blockchain sustainability startup Circularise announced that it has secured €11 million in financing, led by Brightlands Venture Partners, with participation from Asahi Kasei, Neste, and existing investor 4impact Capital. In 2020, the company received €1.5 million in funding from the EU's Horizon 2020 program. This round of financing will be used to expand business operations, product development, and grow its international team. (Source link)

7. Australian mining company Arkon Energy completes $28 million financing, led by Blue Sky Capital

On November 17, according to CoinDesk, Australian mining company Arkon Energy announced the completion of $28 million in financing, led by digital asset market maker and quantitative investment firm Blue Sky Capital, with participation from Kestrel 0x1 and new investment firm Shima Capital. Arkon Energy also announced that it has acquired the Norwegian renewable energy data center Hydrokraft AS, but did not disclose specific acquisition terms. (CoinDesk)

8. Web3 developer platform Buildspace completes $10 million financing, led by a16z

On November 18, Web3 developer platform Buildspace announced the completion of $10 million in financing, led by a16z, with participation from Founders Inc, Weekend Fund, Y-Combinator, Vayner Fund, Protocol Labs, OrangeDAO, Solana Ventures, OpenSea Ventures, Alchemy Ventures, and DreamerVC.

Buildspace aims to provide users with a Web3 learning platform, with current learning projects including Solidity, Ethereum NFT, and Solana Web3 App. (Source link)