Digestive news on the latest developments in Web3, NFTs, Blockchain and Metaverse in China and beyond, brought to you every week by Pandaily.
This week: Babel Finance lost $280 million in trading client funds, Binance CEO sues Bloomberg’s Hong Kong publisher for defamation, NFT black market swells amid China’s crypto crackdown, and more.
Babel Finance lost $280 million trading client funds
Babel Finance, the troubled Hong Kong crypto lender that abruptly suspended withdrawals last month amid a broad crypto market crash, has reportedly suffered heavy losses from proprietary trading of client funds. The Block and CoinDesk first reported on the story.
- The company lost around 8,000 bitcoin and 56,000 ether to forced liquidations in June during a crypto market crash that sent the bitcoin price below $20,000.
- Babel Finance was one of many crypto companies hit hard by the June market contagion. The decision to stop withdrawals comes after Celcius Network, a blockchain-based financial services provider, and Voyager Digital, a crypto investing app, decided to stop withdrawals, with hedge fund Three Arrow Capital also receiving margin calls from multiple lenders.
- “Unhedged positions were introduced during this volatile week in June as BTC fell sharply from 30,000 to 20,000 [proprietary trading] Accounts experienced significant losses, which directly led to the forced liquidation of multiple trading accounts, wiping out ~8,000 BTC and ~56,000 ETH,” according to a restructuring deck issued by the company.
- The company is attempting to convert hundreds of millions of dollars in debt into equity to maintain a revolving credit facility to raise funds. (The Block, CoinDesk)
CONTINUE READING: Read all our articles on Babel Finance!
Binance CEO is suing Bloomberg’s Hong Kong publisher for defamation
Binance CEO Changpeng Zhao on Monday filed a lawsuit against Modern Media CL, the Hong Kong publisher of Bloomberg Businessweek, alleging defamation over an article accusing the exchange of running a “Ponzi scheme.” CoinDesk and Cointelegraph first reported the story.
- On June 23, Bloomberg Businessweek published a profile of Zhao, “Can Crypto’s Richest Man Stand the Cold?” However, in Hong Kong, Modern Media published a Chinese article with a different headline: “Zhao Changpeng’s Ponzi scheme”.
- According to Zhao’s representative, the headline was intended to incite “hatred, contempt and ridicule” for the CEO.
- Zhao called for the issue to be removed from newsstands and for an injunction to prevent the publisher from spreading the message.
- The CEO also filed a disclosure motion — a legal motion asking the court to order the opposing council and party to release a specific piece of material or information — against Bloomberg LP and Bloomberg Inc. in the U.S. District Court for the South District from New York.
- This isn’t the first time Zhao and Binance have sued the media. In 2020, Binance sued Forbes over allegedly defamatory statements, but dropped the lawsuit last year.
- Modern Media is an independent company that licenses content from Bloomberg. Zhao’s filing is a personal lawsuit and has nothing to do with the exchange or the company, Binance confirmed to Cointelegraph. (CoinDesk, Cointelegraph)
TIED TOGETHER: Read all our content on Binance!
NFT black market surges amid China’s crypto crackdown
Traders have begun to turn to off-the-book transactions of used NFTs as China’s regulatory crackdown on crypto and secondary trading in digital assets kicks in. Nikkei Asia first reported this story.
- In July, a blockchain platform operated by Ant Group became Alibaba The Group’s fintech arm began selling digital collectibles inspired by traditional headgear worn by the Miao, an ethnic minority in China.
- A total of 10,000 units were launched for 18 yuan ($2.66) each. They sold out immediately when a rush of buyers glued the system.
- China has issued a blanket ban on crypto trading and mining since September last year due to possible speculation and money laundering risks. In response to these concerns, many Chinese tech companies have launched digital collectibles (digital assets that can only be purchased for Chinese yuan) and blocked resale of the collectibles on their respective platforms.
- In June, tech giants like Tencent Holdings and Ant Group signed a pact to halt the secondary trade in digital collectibles and “self-regulate” their activities in the market, Chinese state media reported.
- However, quite a few services allow users to transfer ownership of digital assets, ostensibly without money changing hands. This creates opportunities for the emergence of a separate industry where platforms can match sellers of digital collectibles with potential buyers. (Nikkei Asia)
Hong Kong University of Science and Technology launches VR courses ahead of Metaverse Campus launch
Hong Kong University of Science and Technology (HKUST), one of the world’s leading research institutions, has announced the opening of a virtual reality classroom to create a digital campus in the metaverse. SCMP first reported this story.
- The VR classroom will also host the opening of the HKUST campus in Guangzhou on Sept. 1, an academic at the institution told SCMP.
- “Many guests may be abroad and unable to attend [the opening]so we will host it in the metaverse,” said Pan Hui, Chair Professor of Computational Media and Arts at the Guangzhou Campus.
- The virtual classroom is part of a larger plan to build MetaHKUST, a virtual campus that will connect the school’s Hong Kong and Guangzhou campuses and allow students and professors to interact with each other without geographical restrictions.
- “[Using Zoom] feels like just looking at a 2D screen. But virtual reality lets you feel like you’re there. I think interaction is very important for learning. How you interact with students around you will enhance your learning,” said the professor.
- In addition to taking classes in the Metaverse, students also have the opportunity to participate in opening days and even virtual space initiation while receiving their diplomas and certificates in the form of NFTs. (SCMP)
Tether says it doesn’t hold any Chinese trading paper
Tether Holdings Ltd., the company behind the world’s largest stablecoin, said its portfolio of reserves does not include any Chinese commercial paper. Bloomberg and the Wall Street Journal first reported the story.
- Tether said in a blog post on Wednesday that it reduced its exposure to commercial paper to around $3.7 billion from $30 billion in July 2021.
- The company plans to further reduce its commercial paper holdings to approximately $200 million by the end of August and to zero by early November at the latest.
- Tether Holdings Ltd. issues and operates the token USDT pegged to the US dollar. In June, the company denied speculation that 85% of its token was backed by Chinese or Asian commercial paper. Since then, she has also steadily increased her exposure to US Treasury bills.
- According to Bloomberg, there is evidence that Tether’s reserves included short-term loans to major Chinese companies.
- Some short sellers have said they believe most of Tether’s commercial paper holdings are backed by indebted Chinese real estate developers, according to a previous Wall Street Journal report.
- While Tether was designed to maintain constant value pegged to the dollar, it fell as low as 94 cents during the crypto market crash in May. (Bloomberg, Wall Street Journal)
Dubai Police launch second round of NFTs
Dubai Police is launching a second round of NFTs as the first government agency in the UAE to apply blockchain technology in the areas of security and strategic communications. Forkast first reported the story.
- An official spokesman said the second batch of NFTs will be launched in October via GITEX, a meeting platform aimed at clients in the technology industry.
- The move is in line with the government’s growing interest in digital assets, as “NFT-related information documented on a blockchain cannot be forged or copied at all,” said Brigadier Khalid Nasser Al Razooqi, director of the General Department of Artificial Intelligence in Dubai Police .
- 150 new NFTs will be made available free of charge on the Dubai Police Force social media platforms for participants who provide their digital wallet addresses.
- Up to 22.91 million people worldwide have expressed an interest in receiving the first batch of Police Department NFTs.
- Al Razooqi further said that Dubai Police had received more than 7,000 direct messages from participants on their social media platforms. (forcast)
That’s it for this week’s newsletter – thanks for reading! As always, we welcome any feedback on how we can improve this newsletter. Write to us [email protected]. See you again next week!