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Coinbase pauses staking ⚔️ Multichain shuts
Multichain shuts operations after Chinese police arrest CEO’s sister. Coinbase pauses staking in California, New Jersey, South Carolina and Wisconsin. Buy 'The Flash' as an NFT. SBF feels lonely.
The Multichain (MULTI) bridge protocol has shut shop.
This decision comes as a consequence of the company's financial constraints and the troubling situation surrounding its CEO, Zhaojun, who is currently in custody with Chinese authorities.
The protocol faced mounting difficulties earlier this year, with users expressing concerns about pending transfers being stuck.
Reports of multiple Multichain executives, including CEO Zhaojun, being apprehended by Chinese authorities circulated during that time. These suspicions were later confirmed by the protocol via Twitter, acknowledging the CEO's absence and his sole access to the servers responsible for the transaction delays.
Read the whole update - here.
Rumours and confirmed arrest
As users flooded Multichain's Telegram platform with complaints about stalled transfers, rumours began to circulate about the arrest of several executives, including CEO Zhaojun. Subsequently, the protocol confirmed on Twitter that Zhaojun was missing and held exclusive control over the servers causing the delays. In the latest development, Multichain has officially confirmed Zhaojun's arrest, leaving the fate of the bridge protocol in jeopardy.
Funds seizure and operational shutdown
In a distressing turn of events, the Multichain team revealed that Chinese authorities seized all of CEO Zhaojun's devices, crypto hardware wallets, and mnemonic phrases. This action effectively impounded the team's funds, leaving them with no choice but to shut down their operations. Without access to the necessary resources and infrastructure, the Multichain bridge protocol found itself unable to continue providing its services to users.
Involvement of Zhaojun's sister
Further complications arose when Zhaojun's family granted the Multichain team engineers physical access to the CEO's desktop computer, which held historical information related to the cloud server. This access was intended to resolve technical issues with two routers and facilitated the partial resumption of operations. However, a month later, using login information obtained from the cloud server, Zhaojun's sister accessed customer assets that were locked in multi-party computation (MPC) wallets. She proceeded to transfer these assets into wallets under her control and subsequently notified the Multichain team. Initially believed to be the work of malicious actors, these transactions accounted for at least $200 million worth of cryptocurrencies.
CEO's sister also arrested
On July 13, Zhaojun's family informed the Multichain team that his sister had also been taken into custody by Chinese authorities. Following her arrest, all communication with her ceased, raising concerns about the status and security of the assets that she had gained control over. The uncertainty surrounding these assets adds further distress to an already dire situation for the Multichain bridge protocol.
TTD Coinbase 🪙
Read the Coinbase blog post - Why we stand by staking.
The leading cryptocurrency exchange, has halted its staking services for retail customers in California, New Jersey, South Carolina, and Wisconsin in response to orders from state regulators. Despite these regulatory obstacles, the company remains committed to advocating for the rights of American citizens to stake their digital assets.
Regulatory proceedings and suspension of staking services
Coinbase recently faced legal proceedings initiated by regulators and a lawsuit from the US Securities and Exchange Commission (SEC) for allegedly violating federal securities law. As a result, the company has suspended its staking services in the aforementioned states. Coinbase's staking services are highly regarded, accounting for almost 10% of all staked Ethereum, surpassing competitors like Binance and Kraken.
Dispute over staking as securities
Coinbase firmly denies the accusations that its staking services qualify as securities. The company argues that staking does not meet the security criteria outlined in the US Securities Act or the Howey Test. Coinbase emphasizes that staking is vital for the cryptocurrency economy, ensuring the security and smooth operation of blockchain networks. The company notes that staking is integral to major blockchains, offering openness, security, and environmental friendliness.
Concerns over US Ban and offshore usage
Coinbase expresses concerns that a ban on staking in the US would limit Americans' participation in the cryptocurrency economy. Such restrictions could potentially drive individuals to utilise less secure offshore services. The company believes that enabling staking is crucial for fostering innovation and growth within the cryptocurrency industry.
Industry-wide regulatory challenges
Coinbase is not the only company facing regulatory hurdles concerning staking services. Kraken, another US-based firm, paid a $30 million fine to the SEC and suspended its staking services for American customers earlier this year.
Coinbase's stock performance and partnerships
Despite the regulatory challenges, Coinbase's stocks recently reached a yearly high, surpassing $100. This surge followed the company's partnerships with traditional financial institutions, as well as filing for a Bitcoin Spot ETF. Notable firms like BlackRock and Fidelity have entered surveillance-sharing agreements with Coinbase, further solidifying its position in the market.
TTD Treasuries 🏧
Tokenised US Treasuries have reached a record high of $621.8 million, showing significant growth in real-world asset tokenisation.
The value of tokenised Treasuries has increased by 448% since the beginning of the year, driven by rising demand.
Tokenised Treasuries attract crypto investors due to higher yields than decentralised finance (DeFi) platforms.
The Franklin OnChain US Government Money Fund is the largest Treasury tokeniser, holding a 48% share of the total.
New entrants like OpenEden, Ondo Finance, and Maple Finance have also entered the market with blockchain-based Treasury products.
Tokenisation of global illiquid assets, including real estate and art, could become a $16 trillion industry by 2030, according to Boston Consulting Group (BCG) research.
Private wealth management firm Bernstein estimates that about 2% of the global money supply, around $3 trillion, could be tokenised in the next five years.
TTD Flash 🐳
Warner Bros. has announced that the highly anticipated DC Comics superhero film, "The Flash," will be released as an NFT on the same day it becomes available on traditional digital platforms.
What are the privileges: It allows fans to purchase a unique NFT that grants them access to the film, exclusive content, augmented reality collectibles, and more. The NFT release will take place on July 18 through the blockchain service Eluvio, enabling fans to buy the movie experience using either credit cards or cryptocurrency.
NFT options and features
There are two NFT options available for fans of "The Flash" movie.
The first is the "Mystery" edition, priced at $35 and limited to 10,000 copies. This edition includes a randomly selected character-based key art (Prime Barry, Young Barry, Batman, or Supergirl) and one of four dynamic menu interfaces.
The second option is the "Premium" edition, which costs $100 and is limited to just 2,000 copies. The "Premium" NFT features one of two pieces of motion art (featuring The Flash, Supergirl, and Batman together or Dark Flash), all four dynamic menu interfaces, and exclusive special features.
Exclusive DC3 Super Power pack NFT
Purchasers of "The Flash" Web3 Movie Experience will also receive a voucher that can be redeemed to claim a DC3 Super Power Pack NFT from the DC NFT Marketplace. Each Super Power Pack contains a trio of digital comics randomly selected from different rarity levels, ranging from Common to Legendary.
Previous WB Movieverse NFT releases
"The Flash" Web3 Movie Experience is the third NFT release from Warner Bros.' WB Movieverse series. It follows the NFT releases of "The Lord of the Rings: The Fellowship of the Ring (Extended Edition)" in October and the 1978 "Superman" movie in June. Owners of those NFTs, as well as DC Bat Cowl and DC3 NFT holders, will have early access to the "Flash" NFT sale.
Reselling and Community Marketplace
From August 1 onwards, fans will have the opportunity to resell their "Flash" NFT on a community marketplace. This marks the first time a major studio film is being released simultaneously as an NFT and on traditional digital platforms.
TTD SBF 🤫
Sam Bankman-Fried, the Mr FTX. Now Imagine.
Sitting at his parents' house in California, awaiting trial for some serious crypto-related troubles. His lawyers are now trying to make his life a little less boring by asking the judge if they can have some guests over.
The lawyers submitted a secret list of potential visitors, including Bankman-Fried's parents' friends, colleagues, and even household help. These people have promised to follow the rules, which include not using smartphones, tablets, or any other electronic devices that could get Bankman-Fried into more trouble.
To make sure they behave, a security guard will check them and make them sign a visitor log. But let's not forget that Bankman-Fried is still under close watch, and he's not allowed to use certain apps like Signal because they could mess with the trial.
The authorities are being extra careful and even wanted to put spyware on Bankman-Fried's parents' phones, but his legal team said, "No way."
In the end, the government agreed to the visitor request, and the lawyers argued that privacy was more important than denying it. So, it seems like Bankman-Fried might get some company, but within the strict rules of his house arrest.
TTD Surfer 🏄
Luxury fashion brand Gucci is teaming up with auction house Christie’s for “Future Frequencies, Explorations in Generative Art and Fashion,” a sale showcasing the work of leading talents in the digital art space.
Cathie Wood’s ARK Invest sells more Coinbase shares, and now is actively investing in Meta Platforms and Robinhood Markets shares.
BlackRock boss Larry Fink continues his crypto push as investment, saying that “it’s going to transcend any one currency.”
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