Gareth Jenkinson
Binance intends to allocate $1 billion for a proposed industry recovery fund, while its CEO revealed intent in a new bid for assets of bankrupt cryptocurrency lending firm Voyager by its United States-based business.
Speaking to BloombergTV on Nov. 24, Binance CEO Changpeng Zhao touched on a number of topics in what has been a tumultuous month for the cryptocurrency ecosystem.
Chief among them was Binance’s proposed industry recovery fund, which is aimed at providing financial support to promising projects in financial distress. The exchange’s founder introduced the idea in the wake of FTX’s now-infamous collapse.
Zhao said that details of the fund were due to be published on the exchange’s blog in the coming days, adopting a fairly “loose” structure with contributions from other members of the cryptocurrency ecosystem:
“There’s been back and forth on how to structure that — do we make it a loose fund or an actual fund? I think we’re kind of going with a loose approach where different industry players will contribute as they wish.”
The fund will be publicly viewable according to the Binance CEO, with contributors set to send funds to a central, transparent blockchain address. Zhao also noted that the fund is expected to go live before the end of 2022 while touting a six-month road map within which he expects to see the industry recover.
The report also noted that Binance.US is interested in a new bid for assets belonging to the now-bankrupt Voyager Digital. The lending firm was one of a handful to go bust in the wake of the Terra collapse in May 2022.
The Binance CEO also said that the exchange would consider a second look at some assets or businesses belonging to FTX. Binance considered a deal to buy out Sam Bankman-Fried’s exchange before its spectacular collapse in November 2022.
Zhao said that FTX had invested in a number of projects, some of which may “be salvageable” and of interest if and when they become available.
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Prashant Jha
Singapore-based crypto lender Hodlnaut is reportedly facing a police probe over alleged offenses of cheating and fraud.
According to reports published in local media, the police’s commercial affairs department has launched an investigation into the founders of the exchange based on multiple complaints against the platform between August and November 2022.
The Singapore police noted that the majority of complaints revolve around false representations and misinformation regarding the company’s exposure to a certain digital token. Police also advised investors impacted by the Hodlnaut crisis to file a complaint online and submit verifiable documents of their transaction histories on the platform.
Neither the Singapore police nor Hodlnaut immediately responded to Cointelegraph’s requests for comment.
The first signs of trouble for the crypto lender came on Aug. 8 when it suspended withdrawals on the platform, citing a liquidity crisis. The suspension of withdrawals came just months after the infamous crypto contagion in the second quarter led by the implosion of the Terra ecosystem.
At the time, the platform claimed they had no exposure to the now-defunct algorithmic Terra stablecoin now called TerraUSD Classic (USTC). However, on-chain data contradicted crypto lenders’ claims and suggested they held at least $150 million in USTC.
The on-chain data was later confirmed by a judicial report in October. The report noted that the crypto lender lost nearly $190 million to the Terra collapse and later deleted thousands of documents related to their investments in order to hide their exposure.
Hodlnaut managed to keep its USTC exposure under wraps for almost three months after the collapse of the Terra ecosystem but eventually fell prey to the liquidity crunch forcing it to seek judicial management under which a court appointed a new interim CEO for the firm. Three months down the line, its directors are now facing a police probe for keeping users in the dark.
In August, the crypto lender had said it was working on a restructuring plan with hopes of resuming operations soon.
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Judith BannermanQuist
Polkadot, a protocol that connects blockchains, has announced its latest initiative to help its ecosystem fight scams.
According to the company, relying on security-minded individuals within its community to fight scams has proven to be an effective method of safeguarding its ecosystem. To incentivize the members of its community to continue to do the work, Polkadot consistently rewards them with bounties paid in USD Coin.
Polkadot shared that its bounty is currently managed by the general curators, which for now, consists of three community members and two people from the W3F Anti-Scam department. However, in the long term, Polkadot hopes that the bounty will be eventually managed exclusively by the community.
As part of the community-led anti-scam initiative, community members are tasked with finding and taking down scam sites, fake social media profiles and phishing apps, as well as protecting its Discord servers from raids. Additionally, the community will create educational materials for users as well as an Anti-Scam Dashboard to act as the central hub for all anti-scam activities in its ecosystem.
Overall, the initiative encourages participating members to come up with ideas for expanding anti-scam activities to other areas. By decentralizing its anti-scam efforts, the Web3 Foundation and Parity have shifted their decision-making process to the community.
Polkadot appears to be making the necessary strides to grow and strengthen its ecosystem. On Oct 17, Cointelegraph reported that Polkadot hit an all-time high in development activity. Project developers reported that 66 blockchains are now live on Polkadot and its parachain startup network Kusama.
Since its inception, over 140,000 messages have been exchanged between chains via 135 messaging channels. Together, the Polkadot and Kusama treasuries have cumulatively paid out 9.6 million Polkadot and 346,700 Kusama ($72.8 million total) to fund spending proposals in the ecosystem.
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This Daily Dose was brought to you by Cointelegraph.
