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- Cristiano Ronaldo sued for promoting Binance, unregistered securities ⚽7️⃣
Cristiano Ronaldo sued for promoting Binance, unregistered securities ⚽7️⃣
PLUS: More foreign banks join China’s CBDC pilot trials. Changpeng Zhao steps down as Binance.US chair.
Manan Vora
November 29, 2023
Snapshot Web3
November 29, 2023
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Regulatory and Legal News
Cristiano Ronaldo is facing a proposed class-action lawsuit alleging that he promoted the crypto exchange Binance and participated in the offer and sale of unregistered securities. The lawsuit claims that Ronaldo's promotion of Binance, including his NFTs tied to the exchange, encouraged followers to invest in unregistered securities on the platform. Ronaldo entered a multiyear partnership with Binance in 2022. The lawsuit alleges that Ronaldo, with his vast reach and influence, knew or should have known about Binance selling unregistered crypto securities. Binance and its founder, Changpeng Zhao, are facing their own legal challenges, including a $4.3 billion settlement with the U.S. government for various violations.
Crypto lender Genesis and its parent company Digital Currency Group (DCG) have reached a repayment deal that could potentially end the ongoing lawsuit aiming to recover $620 million from DCG. In a filing to the U.S. Bankruptcy Court, Genesis stated that DCG agreed to repay its outstanding $324.5 million in loans by April 2024, with Genesis having the option to pursue any unpaid amounts. The proposed agreement aims to allow Genesis to cease the lawsuit filed in September, and it is part of the company's broader plan to repay creditors. The plan will be subject to a vote by creditors before a decision by the judge.
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Innovation and Launches
Following Standard Chartered's entry, more foreign banks, including HSBC, Hang Seng Bank, and Fubon Bank, have joined China's digital yuan central bank digital currency (CBDC), the e-CNY. These banks will enable their clients to transfer and withdraw e-CNY. Hang Seng Bank has allowed personal banking customers to bind debit cards within the official e-CNY app, redeem digital renminbi, and top up the digital renminbi wallet through its mobile banking app. HSBC and Fubon Bank have also introduced similar features for retail e-CNY use for their clients. The banks plan to explore various e-CNY CBDC applications, including cross-border trade, smart contracts, cross-border payments, and supply chain finance.
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Funding and Acquisitions
Bitfinex's tokenized bond, ALT2611 Tokenized Bond, designed to raise $10 million, has only managed to secure $1.5 million after a two-week offer period, according to the official website. The target appears to have been extended for another two weeks. The ALT2611 is a 36-month 10% coupon bond denominated in USDT, issued by Alternative, a Luxembourg-based securitization fund managed by Mikro Kapital. Tether CTO Paolo Ardoino previously labeled the bond as a "new era for capital raises," envisioning USDT as the "underlying denomination asset of this new financial system." The bond was issued on the Liquid Network, a high-throughput Bitcoin sidechain.
Bitcoin miner Canaan reported a 55% drop in revenue to $33.3 million in Q3 2023 compared to the same period in 2022. The decline was attributed to a decrease in mined Bitcoin and a drop in the number of ASIC mining rigs sold. The company also posted a net loss of $110.7 million, a significant contrast to the net income of $6.3 million in the same quarter last year. Despite the challenging market conditions, Canaan aims to raise capital by selling $148 million in equity through an at-the-market offering and securing $125 million from an undisclosed institutional investor.
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Scams and Hacks
The hacker responsible for the $46 million KyberSwap exploit has warned the platform's executives, tokenholders, and liquidity providers to ease hostilities and be more civil. In an on-chain message, the exploiter stated plans to release a statement about a potential treaty with KyberSwap on November 30 but threatened to delay negotiations if further hostility continues. The KyberSwap team had initially suggested a bounty deal, but after the hacker did not comply immediately, they threatened legal action and initiated a public bounty program. The team has recovered $4.67 million from the exploit and is awaiting the hacker's proposed treaty.
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Interesting Reads
The convergence of blockchain technology, big data, and artificial intelligence (AI) is opening up new possibilities for businesses. Blockchain, traditionally used for financial transactions, is now finding applications in fraud detection, anti-money laundering (AML), and supply chain management. When combined with big data and AI, these technologies can create more efficient and cost-effective solutions. Examples include using AI for AML, fraud detection with big data and AI, and validating data in large databases using AI and blockchains. However, challenges such as Bitcoin dominance, funding concerns, reluctance of institutional players, and ethical considerations around AI still exist and need to be addressed for widespread adoption.
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Miscellaneous
The Chicago Mercantile Exchange (CME) has become a major player in cryptocurrency trading, especially Bitcoin futures, surpassing even major exchanges like Binance. Despite the anticipation of a Bitcoin spot exchange-traded fund (ETF), the author argues that the futures market, particularly on the CME, will remain dominant. Limited Bitcoin supply and liquidity concerns in the spot market make futures attractive to institutional investors. The author predicts that, even with a spot ETF, futures trading will expand, with institutional investors likely using CME futures to hedge ETF positions. Clearer regulation for futures also contributes to their continued growth in the cryptocurrency market.
Changpeng Zhao (CZ), former CEO of Binance, is stepping down as the chair of the board of directors for Binance.US following the $4.3 billion settlement between Binance, CZ, and U.S. officials. Binance.US clarified that it was not part of the settlement but acknowledged CZ's decision to step down. The exchange expressed gratitude for CZ's guidance and stated that it continues to be led by Norman Reed and the existing management team. CZ pleaded guilty to one felony count related to Anti-Money Laundering program failures during his tenure as Binance CEO and could face up to 18 months in prison.
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The information provided in this newsletter is for informational purposes only and should not be interpreted as investment advice, endorsement, or recommendation. Cryptocurrency investments carry significant risk due to their volatility. You should consider your financial situation, investment goals, and risk tolerance before making any investments. We strongly recommend consulting a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.
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