On August 23rd, the U.S. Department of the Treasury announced a new addition to the OFAC’s SDN sanctions list, which includes Roman Semenov, a co-founder of TornadoCash. The announcement indicates that he holds Russian nationality and was previously residing in Dubai. The announcement also reveals eight Ethereum addresses associated with him. The U.S. Department of Justice has filed charges against both Roman Semenov and the second co-founder of TornadoCash, Roman Storm. Today, Roman Storm was arrested by the Federal Bureau of Investigation (FBI) and the Internal Revenue Service (IRS). He is facing charges of conspiracy to commit money laundering, conspiracy to operate an unlicensed money transmitting business, and conspiracy to violate sanctions regulations.

2. China’s Court Website Releases Qualification of “Illegal Acquisition of Virtual Currency” link

On August 24th, the China Court Network released an article titled “Qualification of Illegal Acquisition of Virtual Currency.” The article states that there are three viewpoints regarding the criminal qualification of the illegal acquisition of virtual currency. It could be classified as the crime of illegal acquisition of computer information system data; it could be recognized as theft; or it might involve both crimes, and one heavier charge can be selected for prosecution. The legal qualification of illegal acquisition of virtual currency depends on the timing of the occurrence of the action. If it occurred before September 2017, virtual currency was considered property under criminal law, and it might constitute theft and the crime of illegal acquisition of computer information. The heavier charge can be selected for prosecution. If it occurred after September 2017, virtual currency is no longer considered criminal property, and the regulations of property-related crimes no longer apply.

3. Hong Kong’s Regulatory Exchange Updates Summary

a. HashKey to Initiate Retail Trading on August 28 link

On August 21st, according to the Hong Kong Economic Times, HashKey is set to open retail trading on August 28th (next Monday). Initially, retail investors will be able to invest in Bitcoin and Ethereum, with a restriction that investments in virtual assets should not exceed 30% of the total assets. In the future, when regulatory permits are obtained, HashKey will also introduce various derivative products for different types of users. The platform will initially support USD trading and has not yet added support for Hong Kong dollars. Transactions will be limited to bank cards for now and do not support credit cards. HashKey has also entered varying degrees of cooperation with 4 to 5 brokerages in the market to provide trading access for customers.

b. HKVAX, the Third Approved Exchange in Hong Kong, Expects Six More Months to Launch Platform and OTC Trading Services link

On August 21st, as reported by Ming Pao, HKVAX, the third entity in Hong Kong to have obtained preliminary approval for regulatory compliance, has stated that it anticipates requiring about six months to launch its platform and over-the-counter (OTC) trading services. The company is actively progressing with its next round of fundraising, aiming to involve a variety of institutions including brokerages, buyer asset management, and investment banks. Additionally, discussions with licensed platforms abroad are ongoing, with the intention of listing Security Token Offerings (STOs) on major global markets and providing opportunities for interested investors to subscribe.

4. FTX’s Weekly Summary

a. FTX Plans to Sell Cryptocurrency Assets Worth Over $3 Billion via Galaxy link

On August 24th, according to Coindesk, legal documents reveal that FTX intends to initiate the sale, pledge, and hedging of a significant amount of its cryptocurrency assets to return funds to creditors in the form of fiat currency, rather than Bitcoin or Ethereum. FTX aims to execute these transactions cautiously to avoid devaluing its over $3 billion worth of cryptocurrency assets and is therefore seeking the assistance of Mike Novogratz, the CEO of Galaxy Digital, as an advisor.

b. FTX’s Monthly Legal Expenses Reach Nearly $50 Million link

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

c. FTX: Bankruptcy Claims Agent Kroll Targeted, Partial Non-Sensitive Customer Data Exposed link

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

5. Binance’s Weekly Summary

a. US Department of Justice Investigates Binance for Possible Violation of US Sanctions on Russia link

On August 23rd, according to The Wall Street Journal, the U.S. Department of Justice is investigating whether Binance may have violated U.S. sanctions against Russia by offering at least five sanctioned Russian banks as payment options to its Russian customers. Binance responded by stating that it adheres to global sanction regulations and enforces sanctions against individuals, organizations, entities, and countries blacklisted by the international community, denying access to the Binance platform to such actors.

b. Binance Collaborates with the New Taipei District Prosecutor’s Office for a Seminar link

On August 24th, Binance announced its collaboration with the New Taipei District Prosecutor’s Office in Taiwan to host a seminar. The event involved sharing professional insights on investigative work within the virtual asset domain with over 70 prosecutors. The focus was on combatting cybercrime in the field of virtual assets. This seminar marked the second collaborative effort between Binance and Taiwanese law enforcement agencies this summer. In a similar vein, a training course was organized by Binance for the Taiwan Criminal Investigation Bureau in Taipei back in June.

6. Coinbase’s Weekly Summary

a. Coinbase: Invested in Circle, Will Share USDC Reserve Interest Revenue link

On August 22nd, according to Coinbase’s official blog, USDC is set to launch on 6 new blockchains between September and October, increasing its multi-chain access to a total of 15 chains. Coinbase is expanding its support for stablecoins and has made an investment in Circle. Circle will have complete control over the issuance and governance of USDC, while Coinbase will acquire ownership in Circle. Both parties will continue to benefit from the interest income generated from USDC reserves and work together to promote the global adoption of USDC.

b. Coinbase Engages in Negotiations with Canadian Banking Giants to Foster Crypto Ecosystem Development link

On August 25th, as per Coindesk, the cryptocurrency exchange Coinbase is reportedly in talks with major Canadian banking institutions in an effort to gain their support for the country’s crypto ecosystem. Lucas Matheson, the Director of Coinbase Canada, stated that he has been engaging in conversations with tier-one banks in Canada. Additionally, Coinbase has recently received Pre-Registration Undertakings (PRUs) in Canada, committing to meeting several regulatory requirements by specific dates.

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

On August 24th, as reported by Blockworks, the cryptocurrency exchange Bitstamp will cease offering Ethereum staking services to its U.S. customers starting from September 25th. Bobby Zagotta, the CEO of Bitstamp US, stated in a statement that until September 25, 2023, customers will continue to receive staking rewards. After this date, all staked assets will be unstaked, and both rewards and principal will be credited to users’ main account balances. This process may take several days and could be extended based on network conditions. Other services provided by Bitstamp will remain unaffected.

8. Israeli Police Charges Israeli Crypto Giant Moshe Hogeg with $290 Million Cryptocurrency Fraud link

On August 23rd, according to a report by Bloomberg, Israeli police have charged Israeli cryptocurrency magnate Moshe Hogeg and his partners with defrauding investors of $290 million through cryptocurrency scams. In a statement on Wednesday, Israeli police stated that after a two-year investigation, Moshe Hogeg is accused of fraud, theft, money laundering, forgery, and tax offenses. Israeli police have submitted recommendations to the prosecutor, who will decide whether to bring charges and review the evidence of the criminal acts. It is reported that Hogeg and several of his partners (whose identities were not disclosed in the documents) are alleged to have used millions of dollars raised from Israeli and foreign investors in 2017 and 2018 for personal purposes and for four cryptocurrency startups.

9. SEC Alleges Titan Global Involvement in Cryptocurrency-Related Violations link

On August 22nd, the U.S. Securities and Exchange Commission (SEC) announced that it has filed charges against FinTech investment advisor Titan Global Capital. Titan has been accused of using misleading hypothetical performance figures in its advertisements, including claiming an annualized return of up to 2700% for its Titan Crypto strategy, and failing to adopt policies related to employee cryptocurrency trading. Titan has agreed to cease and desist, pay $192,454 in disgorgement of ill-gotten gains plus prejudgment interest, and a civil penalty of $850,000.

10. NFT Startup Recur, Which Previously Raised $55 Million, Announces Closure link

On August 21st, NFT startup Recur, which previously raised $55 million in funding, announced that it is gradually discontinuing its Web3 platform and will completely shut it down on November 16, 2023. All NFT metadata on the platform will be migrated to IPFS. Recur, which was valued at $333 million in a $50 million Series A funding led by Digital in 2021, had been working on creating NFT-based in-game assets, loyalty programs, and digital collectibles.

Fundraising

• Cryptocurrency exchange BitOasis concludes a new round of financing. link
• LuminaDEX achieves strategic financing, with participation from Jump Crypto and others. link
• Web3 game developer Hungri Games successfully completes a seed funding round of $1.9 million, led by Bogazici Ventures. link
• Open-source tool Anytype completes funding of $13.4 million, led by Balderton Capital. link
• Binance Labs officially announces its investment in DeFi yield protocol Pendle Finance. link
• Binance Labs declares its investment in zkWASM infrastructure provider Delphinus Lab. link
• Ideogram AI completes a seed funding round of $16.5 million, led by a16z and Index Ventures. link
• Financial technology company Ramp concludes a financing round of $300 million. link
• Clean mining company Nodal Power completes a seed funding round of $13 million. link
• Lending protocol Maple Finance completes funding of $5 million.link
• Momentum Capital has received an investment of $10 million from the Canadian BM Fund. link

Learn more, check out crypto-fundraising.info.

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