Hedge Fund Down

Banana bets and the Twitter hacker's bitcoin fortune

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Aug. 3, 2020 By Daniel Kuhn If you were forwarded this newsletter and would like to receive it, sign up here.  TOP SHELF Another crypto hedge fund is winding down, Huobi launched a new unit to invest in DeFi and the Twitter hacker is reportedly a bitcoin millionaire. Here's the story: Fund Down Neural Capital, a crypto hedge fund, has closed, having lost half its money since launching in 2017. Three people familiar with the matter said the fund’s crypto-assets were liquidated in December and the fund is in the process of refunding leftover money to investors, a process taking longer than expected. At its height, Neural Capital managed over $13 million from over 40 investors, including Greylock partner Joshua Elman and Expa partner Hooman Radfar. It joins several funds founded in 2017 that have announced closures in 2020, including Adaptive Capital, Prime Factor Capital and Tetras Capital. Banana Fund U.S. prosecutors are seeking to return $6.5 million in bitcoin to victims of the “Banana.Fund” crowdfunding project, which the government described in court papers as a Ponzi scheme. In a forfeiture suit against the cryptocurrency account storing the funds, prosecutors allege Banana.Fund’s unnamed administrator admitted to investors his project had flopped, promised to return $1.7 million to them and then failed to do so. The operator then pivoted to a laundering and refund scheme that ultimately resulted in the U.S. Secret Service’s (USSS) seizure of 482 bitcoin (BTC) and 1,721,868 tether (USDT), court documents show Twitter Hacker The 17-year-old thought to be behind the recent Twitter hack reportedly owns more than $3 million worth of bitcoin. The alleged hacker, Graham Ivan Clark, stands accused of 17 counts of communications fraud, 11 counts of fraudulent use of personal information, one count of breaking into an electronic device and another for organized fraud. His bail was set at $725,000. Federal officials are also charging Nima Fazeli and Mason John Sheppard with aiding in the “intentional access of a protected computer” and conspiracy to commit wire fraud and money laundering, according to criminal complaints published Friday. DeFi Lab Crypto exchange operator Huobi Group is forming a new fund to invest tens of millions of dollars of its own capital in the decentralized finance (DeFi) space. Huobi Group said in an announcement Monday it has launched a new business unit called Huobi DeFi Labs to manage the fund. The group will focus on research, investment and incubation of DeFi-related projects, and has brought on former banker Sharlyn Wu to lead the initiative. Hacker Effects A Spanish cryptocurrency payments app and card issuer has admitted it won’t be able immediately to repay users affected by Friday’s $1.4 million hack and has offered a compromise instead. Madrid-based 2gether said Sunday it hadn't been able to find the funds to reimburse all users the €1.2 million stolen by hackers – 26.79% of the firm's total funds – on Friday evening. The firm has offered to reimburse investors in native 2GT tokens at the issuance price of just under $0.06. "We can assure you, with a great deal of chagrin, that if we could face this theft with our own funds, we would," the announcement reads. MARKET INTEL Tokenized BTC The supply of tokenized bitcoin (BTC) grew more than 70% in July. More than 20,000 BTC (~$225 million) are now tokenized using Ethereum-based protocols. Wrapped Bitcoin (WBTC) represents over 76% of the total tokenized bitcoin supply with over 15,500 BTC tokenized. The total supply grew by roughly $96 million in July, following June’s record growth. Dex Volume July trading volume on decentralized exchanges set its second consecutive record high, rising 174% from June, according to data from Dune Analytics. Aggregate trading volume on decentralized exchanges reached $4,32 billion in July, up from $1.52 billion in June. 41% of July’s volume came from Uniswap, on which traders speculate on assets ranging from “a better Bitcoin” to a coin named after fried chicken. OPINION Value Judgements Crypto is inherently disruptive. In this week’s Crypto Long & Short newsletter, CoinDesk’s Galen Moore asks whether decentralization – and its attendant change making – creates or destroys value within the crypto space. “The “Robinhood Effect” may represent a threat to crypto from stocks, which also seem to now trade unencumbered by fundamentals, via onramps that broaden access,” he writes.  DeFi Defines Ethereum DeFi Dad, an organizing member of the Ethereal Summit and Sessions and DeFi super user, thinks Etheruem has found a narrative it can latch onto. “Five years ago, you could argue Ethereum was attempting to do too much. Even two to three years ago, that was still a valid hypothesis, with stagnant adoption,” he writes.  PODCAST CORNER Bitcoin, Sex and Feminism Chaturbate is among the few traditional porn sites that has integrated crypto in a meaningful way. COO Shirely Lara joins CoinDesk’s Leigh Cuen for an in-depth discussion about bitcoin, sex and feminism. WHO WON #CRYPTOTWITTER Blockchain Bites A newsletter from CoinDesk See previous editions Copyright © 2020 CoinDesk, All rights reserved.  Our mailing address is:  250 Park Avenue South New York, NY, 10003, US  Want to change how you receive these emails? You can update your preferences here.

Bitcoin flash, crash and surge / 🚔 $725k bail for Twitter hacker / Binance Card

Within 15 minutes, Binance bitcoin futures crashed 14%, surged to $99,964, then collapsed

Inside.com Part of   Network August 03, 2020

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Market Watch Bitcoin $11,360 7 day Δ +9.5% Ethereum $393 7 day Δ +24.3% XRP $0.31 7 day Δ +45.5% Prices as of 11:30 a.m. ET

Within 15 minutes, Binance bitcoin futures crashed 14%, surged to $99,964, then collapsed to $11,450. According to CEO Changpeng Zhao, a user’s algorithm sent multiple orders that caused the surge in price. The flash crash, flash surge, and second flash crash: On Aug. 2, 2020, at 12:35 a.m. EDT, Binance's USD-denominated Sept. 25, 2020, quarterly futures contract was trading at $12,340. By 12:42 a.m., that futures contract crashed 14% to $10,647. This crash coincided with a worldwide $1.4b liquidation across multiple exchanges, as well as a simultaneous Ethereum flash crash. Six minutes later, Binance reported "a single user" caused the contract to flash surge 838% to $99,964. Within two minutes that contract had collapsed 88%, trading back to $11,450. Zhao instructed his team to manually rewrite the history of the futures contract in "consideration of future user trading experience" and so that the price chart would be "readable in the future." Binance's redrawn chart of the relevant time period is pictured above. The new version of the chart shows a volume of 28,500 bitcoin at 12:48 a.m. EDT. If that volume is accurate, that implies a volume of at least $330m during that single minute of trading. However, Binance offers leverage of 20-125x on this futures contract, meaning that actual volume traded by users could be as low as $2.5m during those 60 seconds. Binance

A juvenile co-conspirator in the July 15 Twitter hack owns more than $3m worth of bitcoin. Several other arrests have been made, and the FBI has said that its investigation is ongoing. More: A judge set bail for 17-year-old Graham Ivan Clark at $725,000. During a separate investigation in 2019, authorities confiscated 400 bitcoin from Clark. They subsequently returned to 300 bitcoin. Clark is charged with 30 distinct counts of crime. Other arrests include Mason Sheppard of the United Kingdom and Nima Fazeli of Florida. On July 15, a group of cryptocurrency hackers used phone spear phishing to gain "god mode" Twitter access and stole at least $117k using a scam called "CryptoForHealth." Tampa Bay Times

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Jump Capital published the mid-2020 crypto report and is looking at investing in more startups. Some highlights: Jump Capital makes three core assertions: Bitcoin will become digital gold, stablecoins will enable dollarization in many countries, and crypto has enabled a "great global casino." Peter Johnson, Jump Capital Principal, specifies four types of companies in which his venture capitalists are looking to invest today: fiat-to-crypto onramps, financial infrastructure, derivatives exchanges, and compliance technologies. More: The Chicago-based VC firm was founded in 2012 by Jump Trading co-founders Paul Gurinas and Bill Disomma. Jump Trading employs over 700 workers and focuses on high-frequency and automated trading, competing with companies like Jane Street, Hudson River Trading, Two Sigma, and Citadel. The Block Crypto

Chapman Tripp lawyers have delivered a list of grievances on behalf of Cryptopia Exchange's account holders to its liquidator, Grant Thornton. Chapman Tripp is New Zealand's largest commercial law firm. More: Chapman Tripp's letter claims that Grant Thornton has paid itself excessive fees, acted too slowly, not acted impartially, and failed to protect and disburse Cryptopia's assets reasonably and efficiently. Hackers attacked the exchange several times, sending it into liquidation in May 2019. Of the approximate NZ$11m of assets that Grant Thornton has secured, it has paid itself NZ$1.7m in fees. Grant Thornton released an update regarding the exchange's liquidation on June 12. Brave New Coin

A message from CLICKFUNNELS Russel Brunson, traffic expert, and co-founder of ClickFunnels reveals the traffic secrets he's set up for his own business. He now brings in an average of 1.79 Million Visitors to his  website every month! If you struggle with getting traffic to your business, then you need to check out "Traffic Secrets".  Get it for FREE. Just cover shipping. Get your free ebook

Binance Card seemingly launched, but then Binance backpedaled. Account-holders would be able to make everyday purchases using a debit card backed by their Binance portfolio. More: Crypto debit card and wallet provider Swipe (SXP) was ready to announce a lending and borrowing service on Binance's smart chain platform. Swipe already offers its own debit card, but the partnership would be a white-labeled debit card, "Binance Card." Binance published and then deleted a web page with information about Binance Card and didn't respond to questions from reporters. Swipe raised $12m in its August 2019 token sale. Today, Binance is rumored to be a majority owner of Swipe. Swipe (SXP) has rallied 23% this week. The Block Crypto

Quick Hits: Coinbase published a list of 19 candidates for potentially listing on its exchange. China's central bank is calling for an antitrust probe into Alipay and WeChat Pay, popular fiat onramps for Chinese cryptocurrency buyers. U.S. Secret Service officers confiscated $6.5m worth of bitcoin and Tether (USDT) from Banana.fund, claiming it was a ponzi scheme. The government claims that one co-conspirator, "Person 1," had an account balance of $11m at a time when he claimed to only possess $1.73m. India responded to a Right to Information request regarding a bill that would formally ban cryptocurrencies in India, Banning of Cryptocurrency and Regulation of Official Digital Currency Bill, 2019. The reply letter states that despite some consultation proceedings, legislators are still "awaiting approval of the government." Bloomberg published a brief review of Filecoin.

Written and curated by wide-eyed bitcoin watcher since $1, Aaron Wise. Streaming headline junkie, Associated Press fanboy, eye-strained news terminal watcher, 2017 founder of Cryptocurrency Newsfeed. Temporarily based in Florida while awaiting the construction of cryptopia.  Editor Sheena Vasani is a journalist, passionate techie, and UC Berkeley alumna who writes Inside Dev. She started her coding journey at Dev Bootcamp and Thinkful, and is proficient in Javascript and Ruby. In her free time, she runs a project dedicated to breaking mental health stigmas in South Asian communities. She's also currently working on gathering stories about people transcending divides for a new project, A Human First.

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