2022 Week 26 - DeFi Digest
Hey all ??
As usual, there has been a ton of news concerning the industry so we have decided to collate some of the most newsworthy pieces for you. You can find this newsletter on both LinkedIn and our Substack.
Over the last week, Greyscale decided to sue the SEC over their rejected Bitcoin ETF, as the Chair stated that only Bitcoin can be a commodity, in his eyes. In unrelated news, Roger ‘Bitcoin Jesus’ Ver apparently defaulted on US$47 million according to CoinFLEX CEO, however, he refuted the claims. In other news, ImmutableX announced a US$500 million Web3/Gaming fund.
In Korean news, Korean startup ‘Uprise’ is reported to have lost US$20 million by shorting Terra Luna (LUNC) and US and Korean officials have decided to cooperate with one another in regards to the ongoing Terra investigation. Due to this catastrophe, many governments around the world are looking to implement regulations more hastily.
This newsletter is a summary of a number of largely unrelated news pieces from the crypto-verse that might be crypto/DeFi/NFTs/VCs/Macro but touch upon DeFi. It is aimed at people who want to stay abreast of some of the news but are not following along too closely. It is put together by Bisonai - a DeFi company in Seoul that bridges together AI + Blockchain.
If you’d like to get in touch, ping us at?[email protected]. ???Previous newsletters can be found?here.
[tl;dr]
South Korea Corner
Grayscale sues the SEC after its application for a bitcoin ETF was denied
Almost immediately after the U.S. Securities and Exchange Commission (SEC) rejected its request to make its flagship Grayscale Bitcoin Trust product an exchange-traded fund, Grayscale Investments filed a lawsuit against the regulatory body (ETF), according to Coin Telegraph.
In the document, Grayscale only requests that the SEC's order be reviewed by the U.S. Court of Appeals for the District of Columbia Circuit.
Tweet by Greyscale CEO
According to Coindesk, Grayscale CEO Michael Sonnenshein said in a statement:
“Grayscale supports and believes in the SEC’s mandate to protect investors, maintain fair, orderly, and efficient markets and facilitate capital formation – and we are deeply disappointed by and vehemently disagree with the SEC's decision to continue to deny spot bitcoin ETFs from coming to the U.S. market.”
While the SEC points out that CME's futures market is governed by the Commodity Futures Trading Commission (CFTC), another federal body, proponents of the bitcoin ETF contend that the futures markets are still based on the underlying spot bitcoin price. However, that isn’t the only reason the SEC was in the news in the last week.
According to US SEC Chair Gary Gensler, only Bitcoin may be referred to as a commodity.
The only cryptocurrency that Gary Gensler, the chairman of the US Securities and Exchange Commission, could classify as a commodity is bitcoin. On CNBC's Squawk Box, Gensler discussed cryptocurrencies, their rules, and stablecoins.
“Some, like Bitcoin — and that’s the only one I’m going to say because I’m not going to talk about any one of these tokens, but my predecessors and others have said they’re a commodity.”
Crypto Even though the regulator and the Commodity Futures Trading Commission (CTFC) earlier concurred that the asset was a commodity exactly like Bitcoin, Gensler chose not to mention whether he placed Ether in the same commodities boat. This was picked up on by Michael Saylor who posted on Twitter about it. The bitcoin-bull posted the video to his 2.5 million followers along with the statement that bitcoin is crucial as a treasury reserve asset because it would enable institutions and organizations to promote it as a digital currency to boost the economy.
'Bitcoin Jesus' Roger Ver is accused of defaulting on a $47 million debt by the CEO of CoinFLEX.
Roger "Bitcoin Jesus" Ver had fallen behind on a $47 million USDC margin call, CoinFLEX CEO Mark Lamb announced on his official Twitter account. Crypto Potato reported the story last week, 29 June.
Lamb's remark refutes claims that the exchange was experiencing financial difficulties. As a result of Ver's debt, the exchange's treasury is low, and it is looking for ways to acquire money so that withdrawals can resume. Ver and CoinFLEX entered into a specific agreement that banned the exchange from liquidating Ver's positions.
Lamb claims Ver was contacted by the business numerous times to fix this issue, but the proponent of Bitcoin Cash maintained his stance and denied that he owed them any money. In order to demonstrate that "the debt is 100 percent tied to his account," Lamb turned to social media.
The CEO of CoinFLEX also said that his exchange owes Ver nothing, something he wanted to "shamelessly" admit on social media.
Roger Ver, a.k.a. "Bitcoin Jesus," is one of the pioneering, outspoken, and contentious cryptocurrency investors. He has invested in a number of blockchain and cryptocurrency businesses, including Ripple, Blockchain.com, bitcoinstore.com, Kraken, purse.io, and Blockchain.com, but he is best known for running Bitcoin.com from 2015 until 2019.
Ver became known as "Bitcoin Jesus" because of his evangelistic work for cryptocurrency. The multimillionaire bitcoin supporter shifted his allegiance to bitcoin cash in 2017. Ver is a fairly contentious person due to his libertarian ideas and run-ins with the law. He is the CEO of Bitcoin.com, which is based in Tokyo, Japan but operates out of Saint Kitts and Nevis, according to their Linkedin page.
After the story was reported, Ver refuted the claims and flipped the script on CoinFLEX, claiming the latter owed him "a large chunk of money,” as was reported by Crypto Slate.
Launch of $500 million Web3 Gaming Fund by Immutable X
Australian-based Ethereum scaling solution at layer 2 To reward game developers and encourage user adoption of Web3 games based on the platform, Immutable wants to establish a $500 million fund to distribute token grants and investments into the Immutable X protocol. They Tweeted about it on 17 June from their official Twitter account.
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According to Blockworks, the fund combines assets from Animoca Brands, GameStop, and VC firms like Airtree, BITKRAFT, Arrington Capital, Double Peak, and King River Capital. It is made up of a combination of cash and Immutable X's native token, IMX.
TikTok, Illuvium, Ember Sword, GreenPark Sports, ESL, Gary Vee's Vee Friends, Playco, and GameStop, which launched its NFT marketplace over the platform, are some of the current game creators and intellectual property owners on Immutable X.
Since the news, their token is up roughly 30%, according to crypto tracking website CoinGecko.
The Immutable Developer and Venture Fund also intends to offer consulting assistance to collaborating game studios in the areas of tokenomics, NFT (non-fungible token) gaming, game design, community, and marketing.
“We’re taking the lessons learned from building two of the blockchain’s biggest games — Gods Unchained and Guild of Guardians — and hiring the smartest people from Web2 studios like Riot Games,” Immutable CEO James Ferguson said in a statement.
Shorting LUNA cost Korean firm Uprise $20 million.
Uprise, a South Korean company platform for cryptocurrency investments, purportedly lost nearly 99 percent of its assets, or $20 million, when it was forced to liquidate shorting the Luna Classic (LUNC) coin.
The trading desk of Uprise Heybit employs a trading system with artificial intelligence (AI) that was created to lessen the risks involved with leveraged trading.
Seoul Economic Daily, a local news source, stated on Wednesday that Uprise's AI, which it refers to as a "robo-advisor," made a terrible error in May on LUNC as it plummeted sharply from $60 to pennies. The system shorted LUNC but got liquidated along the road due to the token's strange price spikes, resulting in $20 million in losses for the customers and $3 million for the system itself. Uprise lost nearly all of its assets in total.
According to a report by Coin Telegraph, despite suspending services, the company has not formally informed its clients of the losses. According to a representative of Uprise, Seoul Economic Daily:
“Due to great unexpected volatility in the market, there has been damage to customer assets. We plan to finalize the report on our virtual asset business soon.”
Officials of Uprise are apparently working on a compensation scheme for its users in addition to officially informing their users in order to maintain operations. The Terra issue and its following infection have caused large losses, according to Uprise, the most recent centralized crypto service provider to disclose them. It joins the list of companies that have had to take dramatic measures to attempt and stay viable, which also includes BlockFi, Celsius, and Voyager Digital.
US and South Korea will work together on the Terra case
According to South Korea's Yonhap News Agency on July 6, U.S. and South Korean authorities have decided to work together on the inquiry into Terra's collapse.
At the Southern District of New York U.S. Attorney's Office, South Korean Justice Minister Han Dong-hoon met with Andrea Griswold, co-head of the Securities and Commodities Task Force, and Scott Hartman, chief of the Securities and Commodities Fraud Task Force.
While the US is looking into Do Kwon and whether TerraUSD broke any rules, South Korea is looking into Terraform Labs' potential for fraud, tax evasion, and market manipulation. The meeting between Scott Hartman, the head of the Securities and Commodities Fraud Task Force at the same office, and Han and Andrea M. Griswold, co-chiefs of the Securities and Commodities Task Force at the U.S. Attorney's Office for the Southern District of New York, took place on Tuesday, according to officials.
While the U.S. Securities and Exchange Commission is looking into Do Kwon, co-founder and CEO of Terraform Labs, and whether marketing of the TerraUSD before it crashed violated investor-protection regulations, South Korean prosecutors are looking into potential fraud charges surrounding TerraUSD and Luna.
New Regulations Regarding Cryptocurrencies globally
New measures to regulate cryptocurrency have been launched in numerous nations as a result of Terra's meltdown. A new cryptocurrency committee has been established in South Korea to evaluate the projects listed on cryptocurrency exchanges.
According to reports in the US, the administration is collaborating with Congress to draft new stablecoin laws that might take effect before the year is over.
The British government put up a number of legislation changes for cryptocurrency businesses, including stablecoin issuers. The financial regulator in Singapore is proposing new general measures to safeguard ordinary investors.
While this is going on, the EU's Markets in Crypto-Assets (MiCA) framework aims to impose stablecoins with redemption reserve requirements to cover withdrawals as well as a threshold for the daily transactions for the largest operators.
Well, that about wraps up this week! If you’d like to get in touch, email us at [email protected]. ??
Previous newsletters can be found here. Until next time, have a great week ahead!
About Bisonai
Bisonai Technology Group focuses on solving hard technical problems using Blockchain and Artificial Intelligence. We believe in a future of Decentralized Finance (DeFi) and we work on services that bring all benefits of DeFi closer to our lives.
About Kayne
Kayne is DeFi Analyst working for?Bisonai, a DeFi Tech company in Seoul, South Korea. He has a prior background in law and education in Australia and Japan before he was lured into the exciting world of crypto. Recognising that South Korea had emerged as an exciting, crypto-friendly base, he relocated to Seoul. He has a passion for investing and technology, loves to dig into the latest Blockchain and DeFi developments and enjoys keeping an eye on the latest trends in the crypto-verse.
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