PA Daily | SBF had asked Ellison to prepare seven balance sheets; ARK updates Bitcoin spot ETF prospectus

Today's Highlights:

1. U.S. senator urges IRS to accelerate plans to combat crypto tax fraud, hearing to be held on November 7

2.Caroline Ellison: SBF had regulators hit Binance to increase FTX's market share, and SBF had asked it to prepare 7 balance sheets in June 2022

3. SBF says Binance leaked Alameda balance sheet to CoinDesk**

4.Stars Arena: Approximately 90% of lost funds recovered

5.ARK Invest submits updated Bitcoin Spot ETF Prospectus

6.Platypus was attacked with over $2 million in losses and has temporarily suspended all asset pools**

7.Coinbase to launch Big Time (BIGTIME), Binance to launch U-standard BIGTIME perpetual contract tonight at 22:30

8. US unseasonally adjusted CPI recorded 3.7% y/y in September

Regulatory News

The U.S. senator urged the IRS to accelerate plans to combat crypto tax fraud, and a hearing will be held on November 7

A group of senators, led by Democratic Sen. Elizabeth Warren and independent Sen. Elizabeth Warren, are urging U.S. tax officials to begin regulations requiring cryptocurrency brokers and exchanges to report customer trading information to the government ahead of schedule.

When Congress enacted legislation in 2021, it planned for these companies to start reporting digital asset sales and transaction data two years earlier than the above regulations. Warren and others wrote to Treasury Secretary Janet Yellen and IRS Commissioner Daniel Werfel late Tuesday saying "we are appalled by the two-year self-delay in implementing the rule" that would result in billions of dollars in lost U.S. tax revenue. We urge your agencies to implement the final rules as soon as possible, while maintaining the substance of the regulations in the event of an attack by the industry. ”

Caroline Ellison: Paid bribes to Chinese officials to unlock funds frozen on Chinese exchanges

According to CoinDesk, Caroline Ellison, former CEO of Alameda Research, testified that SBF instructed her to use FTX clients' funds to repay Alameda Research's lenders. Despite her misgivings, she did as he asked. Ellison said she has been concerned since spring 2022 that Alameda's reliance on FTX client funds could spell disaster for both companies. She was relieved when SBF's crypto empire began to crumble, because it meant she could stop lying.

Meanwhile, SBF had tried to finance FTX through an investment from Saudi Crown Prince Mohammed bin Salman (MBS). SBF said MBS was previously a potential investor in the exchange. Ellison also mentioned that SBF had hoped to buy Snapchat's parent company.

In addition, Caroline Ellison said she and several FTX and Alameda executives "paid large bribes to Chinese officials" to unlock funds frozen on Chinese exchanges. After the FTX/Alameda team initially failed to negotiate with the Chinese government through lawyers to unlock the funds, they then tried to release the funds through a scheme involving the creation of fake foreign exchange accounts using the identity of "Thai prostitutes", but failed again. Eventually, those funds were secured after Ellison paid out $100 million to a crypto account. She understands that the account is somehow linked to Chinese government officials.

Caroline Ellison: SBF had regulators crack down on Binance to increase FTX's market share

Caroline Ellison, former CEO of Alameda Research, testified that Bankman-Fried is also trying to find a way for regulators to crack down on its rival Binance, a strategy that Bankman-Fried is confident will help boost FTX's market share. But she did not provide any details on how SBF plans to do just that.

SBF alleges that Binance leaked Alameda's balance sheet to CoinDesk

Evidence presented by SBF at trial shows that he believes Binance was responsible for leaking Alameda Research's balance sheet to media outlet CoinDesk, a key event in the collapse of FTX and its crypto business. Alameda CEO Caroline Ellison said in testimony that the SBF prepared a memorandum dated November 6, 2022, outlining potential investors he and others plan to seek bailout. SBF wrote in the filing that Binance has been "running a PR campaign against us." "Binance leaked its balance sheet, leaking it to Coindesk; It was then very publicly announced that they would be selling $500 million in FTT in response, while telling customers to be wary of FTX."

Previously, in November 2022, Coindesk said that Alameda's balance sheet was not provided by Binance.

NFT

! [PA Daily |.] SBF had asked Ellison to prepare seven balance sheets; ARK Updates Bitcoin Spot ETF Prospectus](https://cdn-img.panewslab.com/panews/2023/10/12/images/qOd0B16KRK.png)

Ex-Universe

Shanghai Huangpu District issued support measures to encourage the agglomeration and development of technology enterprises such as blockchain and metaverse

The Shanghai Municipal Government issued the "Huangpu District Support Measures for Grasping the Trend of Science and Technology Innovation Returning to the City and Accelerating the Improvement of the Development Level of Science and Technology". It is proposed to encourage the agglomeration and development of all kinds of science and technology enterprises. Gather a group of enterprises with advanced, innovative, breakthrough or disruptive technologies in financial technology, biomedicine, green and low-carbon, new generation information technology and other industrial fields, and have an industrial leading role, and after identification, give enterprises a one-time scientific research start-up support of 2 million yuan. Attract a group of enterprises with obvious technical or market advantages in blockchain, robotics, chip semiconductors, pharmaceutical outsourcing services (CXO), brain science, metaverse, new materials and other subdivisions, and have obtained certain equity investment, and after identification, give enterprises a one-time scientific research start-up support of 1 million yuan.

Project Updates

Caroline Ellison testified: The SBF had asked it to prepare seven balance sheets in June 2022

According to Bloomberg, Caroline Ellison, former CEO of Alameda Research, said in her latest testimony that the market crash led to a significant depreciation of Alameda's assets, and most of the company's assets were cryptocurrencies, although the company's daily trading was still profitable at the time. Alameda lenders like Genesis began requiring them to repay their loans in mid-June — loans that must be repaid because the loan agreement is open. SBF communicated with Alameda's lenders through communication platforms such as Slack and Telegram, and the jury showed a chat transcript of one of the conversations in which Genesis demanded the return of the $400 million loan. Ellison said: "I was very nervous, we were talking about billions of dollars. I know that Alameda lost a lot of money in the cryptocurrency crash. ”

In June 2022, when the crypto market spiraled downward and Alameda's loans were required to be repaid, her biggest fear was that someone would find out what was actually going on with Alameda and FTX, and everything would fall apart. SBF and Ellison discussed Alameda's balance sheet, which revealed that Alameda borrowed about $10 billion from FTX and about $5 billion from FTX executives and affiliated entities. Overall, this suggests that Alameda is in a very precarious position, and under the guidance of SBF, Ellison has prepared seven versions of Alameda's balance sheet to show potential lenders for fear that the real version will lead to customer withdrawals. Ellison said: "SBF suggested that I prepare some alternative ways to present this information and send him these versions. ”

Stars Arena: Approximately 90% of lost funds have been recovered

Stars Arena tweeted that it had recovered about 90% of the lost funds. An agreement has been reached with the hackers, the funds have been returned, and the other party receives a 10% bounty and 1000 AVAX lost in the cross-chain bridge. The total lost funds were 266,104 AVAX, and the hackers returned a total of 239,493 AVAX through two transactions, with a bounty of 27,610 AVAX.

ARK Invest submits an updated version of the Bitcoin Spot ETF Prospectus

Eric Balchunas, senior ETF analyst at Bloomberg, tweeted that ARK Invest submitted an updated version of the Bitcoin spot ETF prospectus. The new additions include that the NAV calculation does not comply with GAAP, while mentioning that ETF assets in custodians are held in separate blockchain "wallets" and therefore are not commingled with company or other customer assets.

Former Alameda engineer: Alameda lost $190 million to security incidents

Aditya Baradwaj, a former software engineer at Alameda Research, detailed three security incidents that cost the company $190 million, The Block reported. Baradwaj said SBF believes the most important thing for a startup like Alameda is to be able to grow so quickly that he decided to ignore engineering and accounting standards for tech companies and financial services firms. In the first incident, a trader "was fished by accidentally clicking on a fake link while trying to complete a DeFi transaction," resulting in a loss of $100 million. In the second incident, the creator of a liquidity mining farm suffered a scam that cost Alameda $40 million. In a third incident, after an older version of Alameda's "plaintext key file" was leaked, the attackers were able to "transfer funds from some exchanges and place erroneous orders," resulting in a loss of $50 million. Baradwaj said he lost more than 90 percent of his liquid assets when FTX crashed.

Coinbase Launches Big Time (BIGTIME) Soon

Coinbase Assets announced on the X platform that Coinbase will add support for Big Time (BIGTIME) on the Ethereum network (ERC-20 token). If liquidity conditions are met, trading is expected to commence later today. Once the asset is well supplied, trading on the BIGTIME-USD trading pair will be launched in phases.

It is reported that Big Time is a PC multiplayer action role-playing game that combines a fast combat system with an open game economy, and players can play an active role in the generation and exchange of game items.

Binance will launch its U-standard BIGTIME perpetual contract tonight at 22:30

According to the official announcement, the Binance Futures trading platform will launch a U-standard BIGTIME perpetual contract with a maximum leverage of 20 times on October 12 at 22:30 (Beijing time).

The Arbitrum DAO has voted to provide 50 million ARBs for the short-term incentive program

The Tally page shows that Arbitrum DAO has passed an on-chain vote on the short-term incentive plan proposal, which is currently pending. The proposal outlines a one-time consensus framework created by the community to allocate up to 50 million DAO-funded ARBs to incentivize the active Arbitrum protocol. Designed to meet the short-term needs of the community, the program plans to allocate DAO-owned ARBs to incentives while ensuring transparent consensus and allocation methods. It includes two voting rounds and provides incentives for eligible projects to fund incentives through January 31, 2024. It is expected that the authorized funds will be allocated by January 31, 2024. Participating grantees will need to self-report data, dashboards, and ongoing summaries of grant performance.

Farcaster, a decentralized social protocol, is officially open to everyone to register, without whitelist permission

Farcaster, a decentralized social protocol, tweeted that Farcaster registration now does not require whitelist permission, and anyone can sign up, no longer need to be invited. Developers can now build apps, register users, and read/write Hub data without any third party.

Meanwhile, Farcaster co-founder Dan Romero said that Farcaster's client Warpcast is also officially open to everyone starting today, allowing anyone with an iOS device to sign up for Farcaster without pre-existing wallet or any cryptocurrency. Registered users don't even know that their Farcaster account is on the blockchain. However, each user has a "user-controlled" BIP39 seed phrase and an Ethereum wallet.

Test in Prod joins the Optimism Collective core development team and will receive 5 million OPs in four years

The Optimism Foundation has officially announced that Test in Prod has joined the Optimism Collective core development team, and as the third core team, Test in Prod will work with OP Labs and Base to build the OP Stack. Optimism will offer 5 million OP tokens to Test in Prod over four years (30% of the tokens will vest one year later (August 31, 2024); 30% of the tokens will be distributed monthly in the following year; The remaining two 20% tokens will be distributed monthly each year for the third and fourth years).

Sources: Polkadot parent company Parity Technologies laid off more than 300 jobs this week

On-chain analyst Thiccy (@thiccythot_), citing sources, tweeted that Polkadot's parent company Parity Technologies laid off more than 300 jobs this week. In addition, Parity Technologies tweeted that it is discontinuing its go-to-market capabilities to make room for new ecosystem leaders outside of Parity.

Platypus was attacked, losing more than $2 million and has temporarily suspended all asset pools

Blockchain security agency PeckShield monitors that the stablecoin trading project Platypus Finance is suspected of being hacked, and Platypus Finance has suffered a total loss of more than $2 million.

Stablecoin trading project Platypus Finance also tweeted: "Due to suspicious activity in our protocol, we have taken proactive measures to temporarily suspend all asset pools. Further updates will be communicated to the community in a timely manner. ”

The Lido: Launchnodes team will compensate stakers for losses and the validator infrastructure has been restored

Lido Finance said on the X platform that after the Launchnodes team worked overnight, the situation has stabilized and slowly restored the rest of the validator infrastructure. The root cause of the confiscation incident has been identified and minor details are still under investigation. Currently, the forfeiture amount totals 20.04 ETH, which is expected to increase to 23.06 ETH by the time of withdrawal. Infrastructure downtime penalties and overall missed rewards (excluding EL rewards) totaled 5.663 ETH (including confiscated validators). The Launchnodes team immediately expressed their desire to compensate stakers as soon as possible, so 25.663 ETH was paid ahead of today's rebase, meaning that stakers will not see a reduction in rewards for the day due to disruptions and cuts. Once the future penalties and missed rewards of the reduced validators (i.e. validators are withdrawn), a final calculation will be made and Launchnodes have indicated that they will also bear this amount, so that stETH holders do not lose the reward.

Previously, liquidity staking platform Lido Finance said that its protocol had 20 slashing incidents due to a series of infrastructure and signature configuration problems with validators operated by Launchnodes. Lido expects a loss of approximately 20 ETH, worth $31,000, with additional penalties when troubleshooting validators. The authenticators involved are now offline. Lido said that stakers on the protocol will not be affected other than the reduction in daily rewards reflected in the next benchmark adjustment.

The Sui mainnet has been upgraded to V1.11.2, and the Sui protocol has been upgraded to version 27

According to the official announcement, the Sui mainnet has now been upgraded to version V1.11.2, and the SUI protocol has been upgraded to version 27. Upgrade points include: For higher-level transactions, some gas fee settings have been changed to make them consume faster. These changes do not affect any transactions previously running on the network, except to ensure that you are charged for actual usage when you start using resources heavily; Improved the output of the sui client object command, making it an easy-to-understand and navigable table. If standard JSON output is required, the --JSON flag can be used; Updated the display of constants in disassembled Move bytecode to attempt to display deserialized strings if the constant is a valid vector in utf8 format.

Financing News

Crypto trading and lending platform Membrane Labs completed a $20 million Series A round of financing, with participation from Jump Crypto and others

According to CoinDesk, crypto trading and lending platform Membrane Labs closed a $20 million Series A funding round with the participation of Brevan Howard Digital, Point72 Ventures, Jane Street, Flow Traders, QCP Capital, Two Sigma Ventures, Electric Capital, Jump Crypto, QCP Capital, GSR Markets, Belvedere Trading and Framework Ventures.

Important Data

Upbit's STORJ holdings increased to 95.4 million, accounting for 23.85% of total outstanding

Scopescan monitoring shows that 4 hours ago, Upbit withdrew another 25.5 million STORJs ($10.78 million) from Binance and OKX, and Upbit currently holds 95.4 million STORJs ($38.2 million), accounting for 23.85% of the total circulation. As previously reported, Upbit is the largest holder of the STORJ token, now holding more than 70 million STORJ.

The stablecoin USDR dropped its anchor to $0.5 and has now recovered to around $0.68

CoinGecko data shows that the stablecoin USDR (Real USD) has been severely de-anchored, falling to around $0.5 last night, down 49.1% in 24 hours. It has now recovered to around $0.66.

It is reported that USDR is a stablecoin issued by TangibleDAO on the Polygon network in August last year that is backed by physical real estate and anchored to the US dollar. According to the white paper, USDR can be exchanged for DAI at any time at 1:1, and USDR will issue tokens by over-collateralizing real estate and distributing the proceeds to holders, thereby offsetting the depreciation of its pegged currency and enabling real estate tokenization.

Tangible said that the de-anchoring of USDR was caused by the panic sell-off brought about by the redemption of DAI in a short period of time and the real estate liquidation schedule, in order to restore stablecoin prices and user trust as soon as possible, a series of plans will be launched, including: the protocol-owned liquidity (POL) has been withdrawn from the Pearl, USDR has been burned (the protocol cannot redeem itself), and as many insurance funds as possible will be liquidated. Liquid assets and locked token positions in the existing market will be sold. The remaining stablecoins in the POL and Insurance Fund Sale will be made available to the Client through the redemption process described below; A tokenized real estate pool will be launched and USDR will be open for redemption after deployment.

GSR withdrew 5.17 million HFT from Binance 1 hour ago, and now holds 20% of the total outstanding

According to Lookonchain monitoring, GSR extracted another 5.17 million HFT (about $1.53 million) from Binance 1 hour ago. GSR currently holds 41.7 million HFTs (approximately US$12.5 million), representing 20% of the outstanding supply.

Previously, The Data Nerd monitoring showed that GSR Markets withdrew 390,000 HFT (about $118,600) from Binance. Together with the 1 million 12 hours ago, it withdrew a total of 1.38 million HFT (about $425,000) from Binance. GSR Markets is currently the fifth-largest holder with 36.86 million HFT (approximately US$11.2 million).

The US unseasonally adjusted CPI recorded an annual rate of 3.7% in September

The US unseasonally adjusted CPI recorded an annual rate of 3.7% in September vs 3.6% expected and 3.7% in the previous month. The US unseasonally adjusted core CPI recorded 4.1% y/y in September, 4.30% in the previous month and 4.10% expected. The US CPI recorded 0.4% m/m after the quarterly adjustment in September, 0.3% expected and 0.6% in the previous month. US core CPI came in at 0.3% m/m in September, 0.30% in the previous month and 0.30% expected.

PANews APP Points Mall officially launched

Free redemption of hardcore prizes: imKeyPro hardware wallet, first-class warehouse research monthly card, Ballet REAL series wallet, AICoin members, various peripherals and hundreds of selected research report collections, first-come, first-served!