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| Here is a quick look at the hits from the week's first Inside Cryptocurrency newsletter: - The first spot Bitcoin ETF application in Hong Kong,
- Amazon MGM Studios' plans to turn social media rapper Razzlekhan's $4B crypto heist into a movie,
- The doubling in the amount of cash owned by FTX and its affiliates to repay creditors, and more.
Enjoy your reading! Doğa
p/dogayurduneri | |
| 1 | | NFT marketplace OpenSea's CEO, Devin Finzer, has recently revealed that the company still maintains an open-minded approach to acquisition deals, including the potential to be acquired. The platform CEO pointed out that they can certainly consider being acquired if the right partnership comes along. More: - However, Finzer clarified that the company is not actively looking for a bidder.
- He added that talent is one of the main things they look for in an acquisition.
- OpenSea has experienced a 96% decline in its trading volume since January 2022, mainly due to the outperformance of the rival Blur, which went live in late 2022 and became the top NFT marketplace.
- American tech-focused investment firm Coatue Management reduced its stake in OpenSea by 90% in November last year, causing the platform's valuation to decline from $13.3B to $1.4B.
- In addition, OpenSea reduced its headcount by 50% last November, citing a shift in the focus to build a more nimble and ultimately better version of the platform.
- CEO Finzer said the firm did not go downsizing due to financial pressure but restructured and adjusted its headcount to be a much leaner and smaller team that can operate more nimbly in the market.
Zoom Out: - OpenSea previously acquired several crypto-related platforms, including NFT aggregator tool Gem, crypto wallet Dharma, and creator-focused NFT minting platform MintDrop.
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| 2 | | 
What the numbers say: Bankrupt crypto exchange FTX's Chapter 11 operating reports analyzed by Bloomberg have shown that the firm's four largest affiliates increased their combined cash amount to $4.4B at the end of 2023. The figure represents a 91% surge from $2.3B in July last year. Bloomberg pointed out that the total amount of cash held by the company is probably much higher when that owned by other affiliates is also included. Most of the company's cash funds were generated through the sale of digital asset holdings. Relevance: On the other hand, FTX received approval from the U.S. bankruptcy court to sell its $3.4B crypto assets in September last year. At the time, the company's new management said the proceeds from the sales would be used to repay creditors as part of its larger efforts to ultimately exit bankruptcy and relaunch the crypto exchange. The firm's reorganization plan proposes valuing the creditors' digital asset claims based on the crypto prices on Nov. 11, 2022, the day FTX filed for bankruptcy. Still, the new management does not expect customers to be fully repaid. Brands that should care: Since FTX first revealed its plans for a potential relaunch in April 2023, the firm has filed several legal motions to recover the funds withdrawn before the bankruptcy and increase its cash to be repaid to the creditors. The individuals and entities facing lawsuits by FTX include the former CEO Sam Bankman-Fried (SBF), his parents, Dubai-headquartered crypto exchange Bybit, and bankrupt crypto lender Genesis Global. FTX expects to receive confirmation for an ultimate plan for a restart with one of the bidders within Q2 this year. | | | |
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| 3 | | Hong Kong's Securities and Futures Commission (SFC) has recently received the region's first spot Bitcoin exchange-traded fund (ETF) application from Harvest Hong Kong, the local arm of Chinese asset manager Harvest Fund Management. The move came several weeks after the U.S. Securities and Exchange Commission (SEC) approved all 11 spot Bitcoin ETF applications, marking the first time it gave the green light to such a product. More: - The local reports pointed out that the SFC aims to launch the first Hong Kong-based spot Bitcoin ETF after the Chinese New Year on Feb. 10, speeding up the process of approving the ETFs in the region.
- The agency also plans to follow a similar approach to the U.S. SEC and approve multiple spot Bitcoin ETF applications at once.
- Several other major financial institutions in the region, including Venture Smart Financial Holdings Ltd. (VSFG) and Samsung Asset Management, have also previously revealed their intention to launch a spot Bitcoin ETF within 2024.
- Earlier in January, Hong Kong-based crypto exchange HashKey's chief operating officer (COO), Livio Weng, claimed that around 10 financial institutions have started exploring the potential to launch a crypto ETF in the region.
- Spot Bitcoin ETFs allow retail and institutional investors to get exposure to Bitcoin (BTC), the largest cryptocurrency by market cap, through traditional brokerage accounts without dealing with crypto-native platforms that have come under scrutiny by regulators over the past years.
- The newly-popularized products are also expected to bring the nascent crypto industry closer to the more regulated environment of traditional finance, broadening access to Bitcoin for millions more investors.
Zoom Out: - Hong Kong has become quite famous for its crypto-friendly approach over the past years and has shown efforts to establish a regulatory framework for the digital asset market, with its plans to turn the region into a crypto hub.
- This crypto-friendly environment has made the region attractive for many crypto companies.
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| 4 | | The shares of the U.S.-based crypto mining firm GRIID have officially begun trading on the popular American stock exchange Nasdaq under the ticker symbol "GRDI." The company's CEO, Trey Kelly, said the listing represents a significant milestone. More: - Kelly also stated that the company's listing on the Nasdaq would enhance its visibility and liquidity while broadening its investor base.
- The move came nearly a month after GRIID completed a merger with special purpose acquisition company (SPAC) Adit EdTech Acquisition Corp.
- Following the merger, GRIID was also listed on the Toronto-based stock exchange Cboe Canada.
- The firm pointed out that it would continue to trade on the Canadian exchange under the same ticker.
- The company first announced its plans to go public by listing its shares on a stock exchange and making them available for purchase by the general public in November 2021.
Zoom Out: - GRIID has been operating Bitcoin mining facilities since 2019, focusing on affordable, reliable, and environmentally responsible power.
- The company currently has four mining facilities in the U.S.
- Through the latest move, the firm joined other crypto mining companies, such as Marathon Digital, Riot Platforms, and Core Scientific, trading on Nasdaq.
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| 5 | | Solana Foundation, a nonprofit organization dedicated to the growth of the Solana blockchain ecosystem, has handed over the management of its hackathons and accelerator programs to Colosseum, an online platform co-founded by a former Solana executive. As part of the collaboration, Colosseum will hold two to three online hackathons per year on behalf of the organization. More: - A five-week accelerator program dubbed Colosseum Accelerator will host the winners of the hackathons.
- Projects accepted to the accelerator program will receive an initial $250,000 investment from Colosseum.
- The program will also offer participants access to developer support, mentorship, educational content, and a customer base within the Solana ecosystem.
- The accelerator program will end with a demo day where project founders look for venture funding to access further support.
- Colosseum co-founder Matty Taylor, who led the Solana Foundation's hackathons while he was its head of growth, said the program's prize pool for the hackathon winners will be roughly $600,000.
- Taylor also underlined that Colosseum's primary goal is to increase the number of developers and founders who can build products operating on blockchains.
- A recent report prepared by the crypto-focused venture capital (VC) firm Electric Capital showed that the number of active crypto and blockchain developers declined by 24% in 2023.
Zoom Out: - The Solana Foundation's hackathons have attracted more than 60,000 participants across eight programs since 2020.
- The participants of these hackathons have launched 4,000 products and raised more than $600,000 in VC funding so far.
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| 6 | | Amazon MGM Studios, the U.S.-based movie production and distribution studio owned by the tech giant Amazon, has started developing a movie involving the story of a $4B crypto heist. The feature film will cover the life of social media rapper Razzlekhan, whose real name is Heather Morgan, and her husband, Ilya Lichtenstein. More: - Lichtenstein and Morgan were first arrested in the U.S. in February 2022 on charges related to a crypto heist and money laundering scheme.
- In August last year, the couple admitted they stole 120,900 Bitcoin (BTC) as part of their cooperation agreements with U.S. prosecutors.
- At the time, Lichtenstein also admitted that he was the hacker behind the 2016 attack on the crypto exchange Bitfinex, resolving one of the biggest mysteries in the crypto industry's history.
- Lichtenstein currently faces up to 20 years in prison, while Morgan could get a maximum of five years since she was charged with helping her husband launder and hide the source of the illicit funds.
- Amazon MGM Studios' movie will be directed by Hannah Marks, who also wrote the script with the inspiration from an article published in the New York Times in 2022.
- The publication will also participate in the film's production process.
- The name and release date of the movie have yet to be disclosed.
Zoom Out: - The 2016 attack on Bitfinex caused about 119,756 Bitcoin to be wiped off the exchange.
- The stolen Bitcoin funds were worth around $71M at the time of the attack.
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- The Estonian government has approved Ivan Turogin and Sergei Potapenko, two citizens suspected of a crypto fraud involving now-inactive crypto cloud mining service HashFlare, to be extradited to the U.S.
- The U.S. Commodity Futures Trading Commission's chair, Rostin Behnam, has stated that he is concerned about the risks posed by the recent approval of spot Bitcoin exchange-traded fund (ETF) products.
- The European Securities and Markets Authority (ESMA) has proposed that crypto companies outside the European Union (EU) can only serve customers in the region under limited conditions if they want to cater directly without a physical base to prevent unfair competition.
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 | Staff Writer | | Doga is a tech and science editor who has been writing news for nearly 10 years. She worked for leading tech platforms and mainstrem media channels as an editor and presenter throughout his career. Then, she carried her know-how to more than one platform. She is a part-time cat lover and binge-watcher, and also fond of science, space, and emerging tech. She always has a story to tell. She is a bit addict to the laughter and -unfortunately- the '90s culture. | | This newsletter was edited by Aaron Crutchfield | |
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