Market Summary

Bitcoin Price: US$ 16,428.78 (-0.18%)
Ethereum Price: US$ 1,193.88 (-0.97%) 

Several US States Open Investigation Into Crypto Lender Genesis: Report

• Following the collapse of FTX, multiple U.S. regulatory agencies have opened investigations into FTX and other centralized exchanges and operators as the contagion continues.
• Now the Alabama Securities Commission and other states are investigating Genesis Global Capital, according to Barron’s.
• Alabama Securities Commission Director Joseph Borg told Barron’s that “several other states” are part of the probe. Borg did not name the other states.
• According to Barron’s, the investigation into Genesis is part of a broader probe into how connected many cryptocurrency companies are, and if these companies have violated state securities laws. Borg cited “the interdependencies and interlocking connections in the crypto space” as a point of concern due to contagion risk when a player like FTX goes under. Genesis did not comment for the Barron’s story.

Binance’s Zhao says industry is ‘healthier’ after a ‘nasty’ year

• Binance CEO Chanpeng Zhao said the industry is in a “healthier” place after a “nasty” 2022, and he expects better things in 2023.
• “I would expect recovery,” Zhao said at a Binance event in Athens. “So, I think 2022 was a really nasty year, the last six month was like too much has happened. Now the industry is healthier.”
• He declined, however, to make any specific predictions. “The trick for us is to monitor the industry and then whatever is trending we try to support it,” Zhao said.
• The CEO, who launched a recovery fund for troubled crypto companies in the wake of FTX’s collapse, did not mince words when it came to his former competitor.
• “FTX is more like Madoff. It’s lying, it’s ponzi,” Zhao said. “Just because FTX happened, doesn’t mean every other business is bad.” 

Crypto Exchange Huobi Denies Rumors It Will Merge With Poloniex

• Cryptocurrency exchange Huobi has said rumors that it will merge with Poloniex are “categorically untrue.”
• It was reported today by Colin Wu that the two exchanges would merge, a rumor to which Justin Sun subsequently added fuel.
• Justin Sun, the founder of the Tron network, has an involvement in both exchanges. He was part of an investor group which acquired Poloniex in 2019 and is now an advisor to Huobi.
• “We would like to state for the record that rumors stating Huobi will soon merge with Poloniex are categorically untrue,” Huobi said in an emailed statement.

Bitcoin.org’s ‘Cøbra’ Must Unmask to Challenge Craig Wright’s Legal Costs, UK Court Rules

• Cøbra, the pseudonymous operator of bitcoin.org must reveal their identity should they want to contest legal costs demanded by the self-proclaimed inventor of Bitcoin, Craig Wright, in a lawsuit, the High Court in London has ruled.
• The costs against Cøbra were awarded in a copyright case related to the the Bitcoin white paper, the cryptocurrency’s founding manifesto. Wright, an Australian computer scientist, has long claimed to be Satoshi Nakamoto, the pseudonymous inventor of Bitcoin. He accused Cøbra and bitcoin.org of infringing his rights after the website published the white paper, attributed to Satoshi. Wright sought a declaration that, as Satoshi, he owned the copyright.
• Wright was granted permission to serve legal papers on Cøbra in April 2021. That June, after Cøbra failed to appear in court, a judge issued a default order to Cøbra to take down the white paper.
• This is not Wright’s first spin about a courtroom. He suffered a loss this October in Norway, where he was sued for claiming and failing to prove that he is Satoshi. The judge in the case ruled there was enough evidence that Wright had lied and cheated in his attempts to prove he was indeed the inventor of the cryptocurrency. Wright is appealing that ruling, his legal team said.

Binance Launches Proof-of-Reserve System for Bitcoin, Ethereum ‘Coming in The Near Future’

• Binance, the world’s largest crypto exchange by trading volume, released its proof-of-reserves (PoR) system today, which it said “is the next step in its “commitment to transparency and fostering trust in the ecosystem.”
• Per the official announcement, the launch of the PoR system initially starts with Bitcoin (BTC), with other tokens and networks to be added in the next couple of weeks.
• “When we say Proof of Reserves, we are specifically referring to those assets that we hold in custody for users,” said Binance. “This means that we are showing evidence and proof that Binance has funds that cover all of our users assets 1:1, as well as some reserves.”
• The exchange claims it has 582,485 BTC in its reserves, while its users have a net balance of 575,742 BTC — giving Binance a reserve ratio of 101%.

DEX aggregator 1inch to protect MetaMask users from frontrunning

• Decentralized exchange aggregator 1inch is introducing a feature called RabbitHole that’s designed to prevent MetaMask users from getting hit by a certain form of frontrunning.
• The issue at hand is sandwich attacks. This is where a trader frontruns a large buy order by buying the token first, pushing up the price. Once the buy order goes through, the token’s price rises higher, at which point the trader sells at the higher price (or vice versa for the whole maneuver). It results in the victim seeing the trade executed at a worse price.
• The reason this happens is because blockchain transactions are typically broadcast to the network as a whole and there is a period of time before they are included in blocks in the chain. As a result, traders who are able to get their transactions into the chain first — through a range of different methods — are able to frontrun transactions, if it’s profitable enough.
• RabbitHole checks for transactions that are likely to be subject to such sandwich attacks. If it determines a transaction is likely to be attacked in this way, it uses an alternative method to get the transaction into the blockchain. It submits the transaction directly to a validator, such as Flashbots, avoiding it being broadcast publicly.

First Mover Asia: Dogecoin Surges 16% to Continue Its Holiday Cheer

• On a quiet holiday weekend in cryptocurrency markets, DOGE made some noise.
• The popular meme coin soared 16% over the previous 24 hours and was trading at more than 10 cents. DOGE has risen nearly 50% since last Monday with most of its gains occurring during U.S. Thanksgiving holiday celebrations, which started on Thursday. The reasons for the spike were difficult to pinpoint, although social media influencer David Gokhshtein mused to his more than 700,000 Twitter followers on Thursday about the possibility of new Twitter boss Elon Musk and Ethereum co-founder Vitalik Buterin working together on DOGE improvement.

Major Canadian Crypto Exchange Coinsquare Says Client Data Breached

• Coinsquare, one of Canada’s largest cryptocurrency exchanges, may have been breached, but the company claims customer assets are “secure in cold storage and are not at risk.”
• The exchange, which touts itself as “Canada’s trusted platform to securely buy, sell and trade Bitcoin, Ethereum, and more,” emailed customers yesterday to report a “data incident” in which an unauthorized third party accessed a customer database containing personal information.
• According to the email, the breach exposed “customer names, email addresses, residential addresses, phone numbers, dates of birth, device IDs, public wallet addresses, transaction history, and account balances.” Although the email was sent yesterday, Coinsquare discovered the breach last week and notified customers via Twitter.

Solana’s flagship gaming and social media funds have been only partially deployed

• At Breakpoint 2021, Solana Labs announced two flagship funds: a $100 million fund focused on decentralizing social media and a $150 million fund to encourage blockchain-based gaming.
• The social media fund was in partnership with Reddit co-founder Alexis Ohanian, while the gaming fund was in partnership with blockchain gaming startup Forte and VC firm Griffin Gaming Partners — and was expected to be fully deployed within 18 months.
• A year on, the funds have only been partially deployed and the focus has been on small seed round investments, according to Solana Labs CEO Anatoly Yakovenko, speaking in an interview earlier this month in Lisbon at Breakpoint 2022. In terms of the social media fund, Yakovenko said the amount deployed so far is “nowhere near half.”
• “We’ve done like a bunch of small investments, like usually our seed level checks from solana ventures are $100K or something like that. So we’re never a big lead,” he said. 
• Due to a prevalence of well-capitalized VC funds that are interested in the Solana ecosystem, Solana Labs has been able to be frugal with its investments, he added.
• When it comes to social media, Yakovenko said a number of products are in development, including Dispatch, Squads, Dialect and Wordcell, which are effectively decentralized versions of Reddit, WhatsApp, Twitter and other social media platforms.

Multichain DAO builder XDao closes token round at $50 million valuation

• XDao, a startup that helps DAOs expand across different blockchain networks, has raised $2.3 million in a seed round at a $50 million valuation. 
• Investors in the round include Panony, DWF Labs, Telos Foundation and Grizzly Capital, CEO Vlad Shavlidze said in an emailed statement. The funds were raised through a token sale, which closed on Nov. 21. The investment terms include a 12-month cliff and a 36-month linear vesting period, with the tokenomics tailored to the crypto bear market, Shavlidze said. 
• The Singapore-based startup enables the creation of decentralized autonomous organizations through its DAO framework. Users can establish a DAO, deposit crypto assets, manage them by voting and directly interact with DeFi protocols, the company said in a release. 
• “XDao came about in the process of solving our personal pain,” Shavlidze said in the release. “As a member of the DAO syndicate I noticed how difficult it was to set up operations in web3.”