Binance US Exodus Continues

Bitget $100M Fund | FTX Weekly Sells

Marco Manoppo & Karon Pangestu
September 15, 2023

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Good Morning,

I’m back from conference season, currently fleeing Singapore ASAP to not be caught up in the F1 traffic. There were a lot of great discussions, and its generally encouraging to see a thriving number of attendees during a bear market.

If there’s one thing that I missed by not being at Permissionless instead of Token 2049, it was definitely this talk.

Why are we here?
Permissionless II opener from @ErikVoorhees that got an entire crypto conference on their feet
— Permissionless II (@Permissionless)
8:19 PM • Sep 13, 2023

Thank you for the reminder, Erik.

In Today's Email:

What Matters: Binance US exodus 🏃
Founders Highlight: Markus of Mauve 👨‍💻
Deal Flows: Reverie $20M VC Fund 💰

Narratives: Nothing. Binance US news is concerning, FTX is selling, and no new money is coming in yet. If you really want to speculate on Friend Tech, check out this UI.

NOTEWORTHY READS

Coin Center’s read on the Treasury’s proposed broker rules.
Bloomberg’s read on SBF’s elite parents involvements.
Arthur Hayes’ read on macro market update.

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WHAT MATTERS

Binance US Exodus

@JSeyff

State of play: The US-arm of the world’s largest crypto exchange continues to experience an exodus of its staff.

Binance US CEO resigned and the firm cut 1/3 of workforce on September 13.
Binance US Head of Legal and Chief Risk Officer left the firm on September 14.
In the past 3 months, Binance Global (parent entity) has lost 5 executives including its:
- Chief Strategy Officer
- VP of Compliance
- Head of Product
- General Counsel
- Head of APAC

Why it matters: This negative trend happens as the SEC (and potentially DOJ) is building a case against Binance.

The agency claims that Binance US is not cooperating with the probe.
The agency is turning its focus to Binance US’ custodian, a firm called Ceffu.
Ceffu is owned by Bifinity, an entity that’s wholly owned by Binance Global

If this is true, it’s a damning fact as the whole point of Binance US is to have an entirely independent entity free of Binance Global’s control.

2/3
Binance US custodian was just Binance international and they lied to the courts.
We also learn that the external auditors testimony is framed as "auditors concerns" which is the last fucking thing you want.
— Adam Cochran (adamscochran.eth) (@adamscochran)
1:05 AM • Sep 15, 2023

For builders and investors: Every startups take on uncertainty risks (Uber vs Taxi regulation, Airbnb vs Housing regulation).

Finding the right balance between risks, upside opportunity, and downside protection is key. It’s even more critical in crypto, as the Financail regulation is arguably the most powerful compared to other industries.

BUILDER-INVESTOR HIGHLIGHT

Markus Maier, Founder of Mauve

Markus Maier

Markus Maier is the Founder of Mauve, the Real-World Asset focused DEX with AML-solutions; and Violet, a compliance & identity infrastructure for DeFi.

Previous backgrounds: Markus obtained his bachelor's degree in Economics, Political Science, and Philosophy from Brown University before furthering his education to earn an MBA from Harvard.

In 2012, he founded his first company called CulturalMe. It created a research application that allowed consumers and businesses to collaborate across various applications in a web interface
In 2017, he was an intern at Bridgewater Associates.
After a brief stint at Amazon, Markus assumed the role of Chief of Staff at Axel Springer before establishing Mauve in 2023.

The big idea: Markus believes that the future of DeFi is “compliant.” Mauve is a DEX with the compliance of traditional finance.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 100 smart crypto investors' wallet addresses 👇

INSIGHTS

FTX Court-Approved Crypto Asset Sale

Judge John Dorsey has approved the $3.4B crypto asset sale for insolvent FTX, as granted by the US Bankruptcy Court in Delaware.

Jeff Dorman, Arca's Chief Investment Officer, has provided a summary:

Galaxy will act as a fiduciary and sell gradually and opportunistically.
Galaxy is getting significant reverse inquiries, including real funds and exploratory interest.
Most buying will happen through OTC sales, with less expected on exchanges or TWAPs. They'll engage as strong bids come in.
The $100M weekly cap isn't relevant. If a larger bid arises, they can seek court approval, and they aren't obliged to sell weekly. It was a guideline to avoid sudden asset dumping and value erosion for the estate.
Galaxy cannot front-run the sales & profit internally.
Hedging the assets will be opportunistic for Galaxy (long puts to offset a large drop in the spot holdings).

Been tweeting / replying a lot today about the FTX court approved sale of crypto assets, so if you missed key points, here's a summary with a few updates:
1) Galaxy Asset Mgmt, not their trading desk, won the bid. They must act as a fiduciary & sell gradually & opportunistically
— Jeff Dorman, CFA (@jdorman81)
11:13 PM • Sep 13, 2023

DEAL FLOWS

Reverie $20M Crypto Venture Fund

Reverie

Deal flows remains steady this week 📈 — we saw $185M+ in deals.

Reverie, an investment firm, just launched its first fund called Reverie Fund One, a $20M crypto-focused venture fund.

Reverie provides monetary support for pre-seed and seed-stage startups. The firm will also advise on community building, business models, marketing, and more for the investee.
Reverie’s Co-Founders are Larry Sukernik, who previously led venture investments at DCG, and Derek Hsue, who was on the investment team at Blockchain Capital.

Another notable deal: Bitget has established a $100M pot for ecosystem growth through investments in exchanges, data analytics firms, and media organizations.

Deal flows in the past week:

Helix, $2M Pre-Seed Round
Movement Labs, $3.4M Pre-Seed Round
Octav, $2.65 Seed Round
Club3, $3M Seed Round
Layer N, $5M Seed Round
Fipto, $16M Seed Round
Portals, $0.5M Seed+ Round
Fleshwire, $10M Series A Round
Mocaverse, $20M Equity + Token Round
0xPass, $1.8M Unknown Round
Parallax, $4.5M Unknown Round
GRVT, Undisclosed $ Seed Round
Okapi, Undisclosed $ Unknown Round
Mountain Protocol, Undisclosed $ Seed Round

QUICK BITES & MEME

Genesis ceases all crypto trading services.
Binance US lost legal and risk executives.
Top Democrat tells the SEC & CFTC to bolster crypto transparency.
Polygon releases proposals for 2.0 upgrade and POL token migration.
Coinbase’s Armstrong wants DeFi to take CFTC to court.
Pantera eyes mid-stage crypto firms.
Huobi rebrands to HTX for its 10th anniversary.
Ripple opens up Liquidity Hub to Brazil and Australia.
Vitalik says projects should consider how long HK's crypto friendliness will last.
Bybit to exit the UK market as new regulations loom.
Mila Kunis & Ashton Kutcher’s charged by the SEC over NFT projects.

Arthur and Sam met in the arena.
Sam got fat, bankrupt, went to prison, and forced out of veganism thanks to unconsensual sausage.
Arthur got rich, jacked, successfully bribed officials with a coconut, and now lives his best life running around and slamming bottles in the… twitter.com/i/web/status/1…
— Autism Capital 🧩 (@AutismCapital)
4:01 AM • Sep 14, 2023

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