1. Hong Kong SFC Approves Hashkey Pro and OSL’s License Upgrade, Allowing Retail Trading link

On August 3rd, HashKey Exchange announced the official upgrade of its Type 1 and Type 7 licenses, making it the first licensed trading platform in Hong Kong catering to retail users. In addition to facilitating fiat deposits and withdrawals, HashKey Exchange will collaborate with Standard Chartered Bank to provide users with fiat fund deposit and withdrawal services. Furthermore, the platform has introduced compliant over-the-counter (OTC) trading, expanding the range of trading options available to users. Following HashKey, OSL(OSL Digital Securities Limited) has also received approval for an upgraded license from the Hong Kong Securities and Futures Commission, with its initial offerings focused on BTC and ETH.

2. US IRS Issues New Guidelines: POS Blockchain Cryptocurrency Rewards Subject to Taxation link

On August 1st, according to @BillHughesDC, the latest guidance from the United States Internal Revenue Service (IRS) indicates that for taxpayers who use the cash method of accounting and hold a Proof-of-Stake (POS) blockchain cryptocurrency, receiving additional units of cryptocurrency as rewards upon validation, the fair market value of these validation rewards will be included in their total income for the taxable year in which they have control and dominion over these rewards. The fair market value is determined based on the date and time the taxpayer gains control and dominion over the validation rewards. Similarly, if a taxpayer stakes cryptocurrency on a Proof-of-Stake blockchain through a cryptocurrency exchange and receives additional units of cryptocurrency as rewards, the same provisions will apply.

3. Binance’s Weekly Summary

a. US Department of Justice Officials Considering Fraud Charges Against Binance, Exploring Other Options Due to Market Impact link

On August 3rd, as reported by Semafor, officials from the United States Department of Justice are reportedly considering fraud charges against Binance. However, federal prosecutors are concerned that if they were to prosecute Binance, it could trigger a run on the exchange, similar to the liquidity crisis experienced by FTX in the past, resulting in financial losses for consumers and potentially causing panic in the cryptocurrency market. Prosecutors are exploring alternative options, such as fines and deferred prosecution agreements. This outcome would be a compromise, holding Binance accountable for alleged wrongdoing while minimizing harm to consumers.

b. CZ Attempted to Shut Down Binance.US Earlier This Year link

On August 2nd, according to a report from The Information, Binance CEO CZ had attempted to shut down BinanceUS earlier this year. However, BinanceUS CEO Brian Shroder expressed opposition to this decision. Subsequently, CZ tried to sell BinanceUS and held discussions with executives from Gemini and sovereign wealth funds.

c. CZ: In Addition to FDUSD, Next Partner for a USD Stablecoin to be Announced link

On July 31st, CZ mentioned in the latest Ask Me Anything (AMA) that in addition to the recently announced FDUSD, Binance will also reveal the next partner for a USD-pegged stablecoin. Binance is also exploring algorithmic stablecoins with a small team. CZ expressed the intention to collaborate with various stablecoins from different regions in the future to achieve greater decentralization and work with as many stablecoins as possible. Furthermore, CZ criticized the lack of sufficient audit reports for USDT, considering it somewhat opaque and potentially risky.

d. Binance FZE Obtains Operating MVP License from Dubai’s Virtual Asset Regulatory Authority (VARA) link

On July 31st, Binance announced that its subsidiary, Binance FZE, has been granted an Operational MVP License by the Dubai Virtual Assets Regulatory Authority (VARA). Eligible users can now access regulated virtual asset services in Dubai through Binance FZE, including fiat deposit and withdrawal services.

e. Binance Japan Officially Lists 32 Tokens for Trading link

On August 1st, local time on Tuesday, Binance officially launched a cryptocurrency trading platform in Japan that complies with local regulations. Japanese customers can start applying for accounts from mid-August and trading on the new platform will be available from December 1st. Binance Japan has announced a list of 32 tokens available for trading, including BTC, ETH, BNB, ADA, ALGO, ASTR, ATOM, AVAX, AXS, BAT, BCH, CHZ, DAI, DOGE, DOT, ENJ, ETC, IOST, LINK, LTC, MATIC, MKR, ONT, QTUM, SAND, SHIB, SOL, TRX, XLM, XRP, XTZ, and ZIL.

4. FTX Submits Restructuring Plan: Debtors Prioritized, FTT Equity Zeroed, or New Offshore Exchange Created link

On the 31st of July, the FTX restructuring team submitted a comprehensive reorganization proposal. The primary facets encompass:

1.Categorization of claimants into distinct groups, encompassing FTX offshore users (referred to as “Dotcom claimants” in the documentation), FTX U.S. users, NFT users, general unsecured creditors, secured creditors, and subordinated creditors. General creditors encompass Alameda’s creditors or trading partners, while subordinated creditors encompass tax and penalty obligations.

2.The hierarchy of creditor preferences shall be determined in accordance with “waterfall priorities.” Each class of creditors shall receive repayment from the remaining pool of claims proportionally, following the satisfaction of the preceding class. The precise sequence of payments is established through negotiation with stakeholders.

3.FTT holders (whether affiliated with FTX or not), preferred stockholders, 510(b) claimants, and other equity interests will be nullified.

4.Dotcom claimants have the option to consolidate their assets to create an offshore exchange.

On the same day, the FTX Creditors Alliance conveyed their perspectives on the FTX restructuring plan via Twitter. The United Creditors Committee (UCC) should choose the team to operate FTX 2.0 and also demand the restart and recovery of tokens, along with accruing interest on their $2.6 billion cash holdings. UCC criticized John Ray and his team for not investing these funds in short-term government bonds, branding them as ineffective operators, and indicating the potential opposition to their forthcoming motion to extend exclusive rights. This would allow creditors to present their own proposals.

5. ASIC Files Federal Court Lawsuit Against eToro Over Cryptocurrency CFD Products link

On August 3rd, the Australian Securities and Investments Commission (ASIC) initiated a federal court lawsuit against the cryptocurrency trading platform eToro over its Contracts for Difference (CFD) products. ASIC has alleged that eToro violated its licensing obligations to operate with due diligence, fairness, and honesty, and failed to properly design and distribute its CFD products. The regulatory authority is concerned that eToro’s actions could expose a significant number of retail customers to CFD products that may not align with their investment goals, financial conditions, and needs, posing a substantial risk of harm to consumers.

CFDs are leveraged derivative contracts that allow customers to speculate on the value fluctuations of underlying assets, such as foreign exchange rates, stock market indices, individual stocks, commodities, or cryptocurrencies. This legal action highlights ASIC’s commitment to ensuring the proper conduct of financial service providers and protecting consumers in the cryptocurrency trading space.

6. Tether Releases Q2 2023 Attestation Opinion Completed by Audit Firm BDO link

On the 31st of July, Tether released the attestation opinion for the second quarter of 2023, conducted by the accounting firm BDO: Excess reserves increased by approximately 850 million US dollars, reaching 3.3 billion US dollars; operating profit exceeded 1 billion US dollars, showing a 30% quarter-on-quarter growth; total assets amounted to 86.5 billion US dollars, while total liabilities stood at 83.2 billion US dollars.

7. MicroStrategy Increases Bitcoin Holdings to 152,800 Coins in Q2 link

The latest earnings report released by MicroStrategy (MSTR) reveals that as of July 31st, the company holds 152,800 bitcoins, with an addition of 12,333 bitcoins in the second quarter, marking the largest quarterly increase since the second quarter of 2021. The depreciation expense for the held bitcoins in the second quarter amounted to $24.1 million, contrasting with $917.8 million in the same period last year and $18.9 million in the first quarter.

MicroStrategy intends to issue and sell up to $750 million worth of stocks to provide funding for Bitcoin purchases and other purposes. Following this announcement, the price of Bitcoin surged from around $29,200 to over $29,400, and currently stands at $29,184.

8. Litecoin Network Successfully Completes Third Halving of Block Rewards link

The Litecoin network has successfully undergone its third block reward halving at block height 2,520,000, reducing the block reward from 12.5 LTC to 6.25 LTC. As of the time of writing, the price of LTC is $82.82, experiencing a 9.0% decrease over the past 7 days.

9. Polygon Zero Accuses zksync of Copy-Pasting Source Code Without Attribution link

On August 4th, Polygon Zero published an accusation against zksync, alleging that zksync copied and pasted its source code without proper attribution and made misleading statements about the original work, which violated the principles of open source and harmed the ecosystem. The zksync development team, Matter Labs, recently released a significant part of the Boojum library that was allegedly copied and pasted from Polygon Labs’ Plonky2 proof system without proper attribution. Moreover, misleading claims were made regarding the performance of Plonky2 compared to Boojum.

Matter Labs has denied the allegations made by Polygon Zero, stating that the code in question is “clearly attributed” in a line at the top of one of the files. A spokesperson from Matter Labs remarked that Polygon’s blog post contained “untruthful statements.” Polygon’s blog post also presented other examples where code appeared to be used from Matter Labs without proper attribution. While Matter Labs has yet to address these specific instances, they have indicated that a more comprehensive response will be provided shortly.

10. Curve Faces Hacker Attack, Founder Sells CRV link

In the early hours of July 31st, Ethereum programming language Vyper tweeted that the recursive locks in versions 0.2.15, 0.2.16, and 0.3.0 had malfunctioned. Following this, Curve’s official Twitter account posted at 12:45, stating that due to the recursive lock issue, several stablecoin pools (alETH/msETH/pETH) utilizing Vyper 0.2.15 were subjected to attacks, while other pools remained secure. According to data from PeckShield, on the night of July 30th, Alchemix, JPEG’d, MetronomeDAO, deBridge, and Ellipsis collectively suffered losses exceeding $26.76 million. The situation escalated with an attack on the CRV-ETH pool at 03:08 on July 31st, with the cumulative losses from this security incident surpassing $51.95 million, as per PeckShield’s statistics.

This situation has raised concerns about a potential liquidity crisis due to the substantial amount of CRV used as collateral across various lending platforms by Curve’s founders. In an effort to prevent significant on-chain liquidations, it has been reported by @EmberCN that the Curve founders have resorted to an over-the-counter (OTC) approach, selling a total of 106.025 million CRV tokens to 19 investors/institutions, thereby acquiring $42.41 million in funds. The sale is still ongoing.

Fundraising

• The zkPass privacy protection protocol has successfully raised $2.5 million in its seed funding round. link

• Socket has completed its Series A funding round, led by a16z, raising $20 million. link

• Solv Protocol has successfully secured $6 million in funding, with participation from investors like Laser Digital and Bytetrade Labs. link

• DeFi protocol Conic Finance has announced a successful fundraising of $1 million. link

Learn more, check out crypto-fundraising.info.

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