Judge Araceli Martinez-Olguin has denied Justin Sun-advised BiT Global’s motion to get a temporary restraining order against Coinbase over the delisting of Wrapped Bitcoin (WBTC). 

BiT Global’s original lawsuit alleged that Coinbase had hurt the custody provider’s reputation and engaged in monopolizing behavior to benefit Coinbase Wrapped Bitcoin (cbBTC). BiT Global sought an order that would obligate Coinbase to relist WBTC. 

This lawsuit came after Sun launched a series of hypocritical attacks on Coinbase, claiming that the exchange must have issues that prevent it from completing a proof-of-reserves process.

Notably, Sun-owned Poloniex has not completed a proof of reserves process and operates a much larger tokenized bitcoin (BTC) product that doesn’t disclose its collateral.

Coinbase’s response pointed out that it considered it an “unacceptable risk that control of wBTC would fall into the hands of Justin Sun.” Additionally, it pointed out that BiT Global “refused to answer” questions about the ultimate ownership of BiT Global.

Read more: How involved is Justin Sun with WBTC’s new custodian BiT Global?

Elsewhere, Sun-advised HTX (formerly Huobi) recently redeemed over 7,000 WBTC that it had not disclosed on its proof-of-reserves. Strangely, HTX has 0 WBTC volume on the exchange.

Adding to the strangeness, Sun-advised and Donald Trump-endorsed World Liberty Financial has been acquiring WBTC, seeming to swap approximately 100 BTC worth of cbBTC for WBTC.

Sun’s activities in the tokenized BTC space taken as a whole seem borderline inexplicable.

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The post BiT Global cannot force Coinbase to relist WBTC in lawsuit yet appeared first on Protos.

Coinbase has filed its response to BiT Global’s lawsuit over the delisting of Wrapped Bitcoin (WBTC). 

Justin Sun-advised BiT Global’s original lawsuit centered around Coinbase’s decision to delist WBTC. The custody provider alleged that this was an unfair assault on its reputation that could potentially lead to it losing “more than $1 billion in its market valuation.”

It additionally alleges that Coinbase was attempting to monopolize the tokenized bitcoin (BTC) space to favor its own product, Coinbase Wrapped Bitcoin (cbBTC).

BiT Global is seeking an order that would obligate Coinbase to relist WBTC.

Read more: Justin Sun-advised HTX has redeemed 7,300 WBTC it did not disclose

In its response to the lawsuit, Coinbase took aim at Sun. It pointed out that the decision to delist WBTC was centered around a belief that there was an “unacceptable risk that control of wBTC would fall into the hands of Justin Sun.” 

Coinbase’s filing also noted that BiT Global “refused to answer” questions “about who ultimately owned and controlled BiT.”

Furthermore, the exchange noted that it makes up “less than 1% of transactions involving wBTC,” suggesting BiT may have been exaggerating the potential harm to its business from this delisting.

Read more: Justin Sun has 99 problems and WBTC is two of them 

The filing also challenges the reputational harms suggested by BiT Global, pointing out that “long before Coinbase took any action,” the market already started to react to the change in WBTC. According to Coinbase, this means “any diminished trust in wBTC was caused by its association with Mr. Sun — not by Coinbase.”

Exhibits attached to the filings and declarations also directly asked BiT Global about Sun’s other tokenized BTC project, which is offered by Poloniex and for which he refuses to confirm collateral. 

BiT wasn’t able to verify the collateral of this other product.

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The United Kingdom’s Financial Conduct Authority (FCA) has issued a warning that Retardio, a grossly offensive Solana-based memecoin and NFT project, “is not authorised” by the regulator. 

Retardio responded by posting a meme that depicts Jeff Bezos in clown makeup. 

It appears that the token has no reason to exist except to allow a contingent of Solana-based cryptocurrency traders an asset on which to speculate.

Following the announcement from the FCA, the token’s price was buoyed, according to data from DexScreener. The total market capitalization for the project has again breached $100 million.

The FCA has been trying to focus more on crypto, asking today for industry feedback on its new discussion paper looking at regulations for the space. 

Read more: TikTok accused of operating as crypto exchange in the UK, report

Additionally, the FCA has grown its cryptocurrency-focused staff this year. Its number has now reportedly reached triple digits and its fastest-growing team is the the policy team. 

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Justin Sun-affiliated BiT Global has filed a lawsuit in the Northern District of California against Coinbase that alleges a variety of infractions centered around the exchange’s decision to delist Wrapped Bitcoin (WBTC). 

When Coinbase decided to delist WBTC, it claimed that as of its “most recent review,” WBTC no longer met its listing requirements.

This led Sun to launch a series of hypocritical complaints at the exchange, including implying that Sun-owned Poloniex has deep issues that prevent it from completing a proof-of-reserves process.

Read more: Justin Sun reveals Poloniex issues prevent proof of reserves 

BiT Global’s lawsuit claims that it risks suffering losses of “more than $1 billion in its market valuation” due to the assaults on its reputation from Coinbase. Furthermore, it tries to claim that Coinbase is motivated by a desire to monopolize the tokenized BTC space with its token, cbBTC.

It’s important to note that recently, Sun-advised HTX has been the largest redeemer of WBTC and the market capitalization of WBTC has grown more than its competitors. One of the HTX redemptions is even described in the lawsuit as evidence that Coinbase had hurt BiT Global, which is strange considering Sun advises both BiT Global and HTX. 

The lawsuit also attempts to use Coinbase’s other listing decisions, including PEPE and DOGWIFHAT, to claim that “Coinbase has virtually no standards for what can be listed.”

Strangely, the lawsuit claims that “bitcoin’s design was locked into place,” despite the Taproot soft fork that extended bitcoin’s functionality after the 2018 period described in the lawsuit. 

The lawsuit hopes to force Coinbase to once again list WBTC, as well as pay damages based on the hypothetical harm to BiT Global’s market valuation. 

A Coinbase spokesperson told Protos, “Coinbase is committed to maintaining the high integrity of our listing standards, and we regularly evaluate assets listed on our platform. Should an asset fail to meet those standards, it is delisted.”

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After ringing the bell at the New York Stock Exchange (NYSE) today, Donald Trump, the United States president-elect and famous felon, announced that he “will be doing something great with crypto.”

This was in response to a question from Jim Cramer that seemed to allude to a “strategic bitcoin reserve.” Trump has previously promised to create a “strategic national bitcoin stockpile.”

Elsewhere yesterday, World Liberty Financial, a crypto project endorsed by Trump that describes him as the “Chief Crypto Advocate,” has been diversifying the assets in its multisignature wallet, apparently exchanging USDC for ether, LINK, and AAVE.

The protocol itself intends to exist as an AAVE wrapper and it has already partnered with Chainlink.

Read more: Justin Sun buys more of Trump’s WLFI than it planned to sell

Interestingly, this change in the composition of the multisignature wallet was not discussed on the governance forum and was not voted on by tokenholders. This token was explicitly marketed as a “governance token.”

The firm has sold approximately 4.45 billion tokens, with nearly half of them going to Justin Sun, a crypto entrepreneur and the target of a SEC lawsuit that alleges he participated in unlawful promotion of securities and price manipulation.

Additionally, over 22 billion tokens — that’s five times the number that has been sold to the public — went to a Trump-affiliated firm. 

This firm also receives 75% of protocol revenue, despite the fact that Trump and his children are very explicitly not directors or employees of this firm.

Trump’s wife Melania, another cryptocurrency entrepreneur whose team has been accused of wash-trading her NFT collection, rang the NYSE bell several years ago.

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Haliey Welch, the media executive behind the Talk Tuah podcast, launched a memecoin called $HAWK in collaboration with overHere. The token has attracted significant controversy as its early market capitalization of nearly $400 million has quickly plummeted to under $20 million. 

This has led a number of Welch’s fans to brand it a scam, and the project has faced accusations that the team has been selling the token — something overHere has publicly denied.

These accusations have often centered around the fact that Bubblemaps claimed 96% of the supply was in a single cluster.

Assuming overHere is telling the truth and the team intended to follow the “Hawkanomics” token distribution plan, it’s important to note that it seems less than half of the token supply would be allocated to the public. 

What real utility for $HAWK?

Besides the distribution, there are many other potential criticisms that can be levelled at this project, including potential problems with its marketing.

overHere has publicly advertised that along with Welch, it will be “creating real utility for memecoins” with this project.

However, the website for $HAWK, as well as the entirety of the available documentation, doesn’t describe anything resembling utility.

Indeed, the closest the website comes to describing this so-called “utility” is claiming that “hundreds of thousands of non-crypto users will be onboarded by $HAWK.” 

However, the project seems incredibly unlikely to ever achieve that goal. Furthermore, onboarding people is not prima facie “utility,” as utility requires the token to be able to be used.

Furthermore, despite claiming that the project will onboard “hundreds of thousands of non-crypto users” the Token Terms and Conditions additionally claim that, “TOKENS ARE ONLY INTENDED FOR THOSE PERSONS WHO ARE KNOWLEDGEABLE AND EXPERIENCED IN CRYPTOCURRENCIES, BLOCKCHAIN, AND RELATED TECHNOLOGIES.”

It is unclear how this token could be intended to onboard “non-crypto users” while also only being intended for people who are “knowledgeable and experienced in cryptocurrencies.”

Protos has reached out to overHere and Penthouse Life (Welch’s management) several times since Friday morning to get clarification on what “real utility” this offers. We have not received a response. 

What Cayman Islands foundation?

Following the token’s controversial launch, Welch and overHere took to an X Spaces to explain what happened.

Throughout this Spaces, the team repeatedly referenced a Cayman Islands foundation that was behind the token.

Oddly, the terms and conditions for $HAWK reference “Tuah the Moon Inc.” which appears to be a British Virgin Islands business, not a foundation. It’s not clear what role the frequently mentioned foundation is fulfilling, or even what its identity is. 

Read more: US congressman Mike Collins goes from altcoins to memecoins

Strangely, the X Spaces is no longer publicly available.

Protos has reached out to overHere and Penthouse Life for clarification on why the Spaces was deleted and the nature of this Cayman Islands foundation and British Virgin Islands business. However, once again, at time of publication, we had received no response. 

So what?

Some users online have been quick to defend Welch, claiming she wasn’t knowledgeable enough about cryptocurrency to be held responsible for these problems. Strangely, this defense would mean she’s not the intended audience for her own token, based on her own token’s terms. 

Others have tried to take advantage of these stumbles to launch their own competing memecoins. Many of these centered around jokes involving Welch’s famous meme, or suggesting she was likely to face jail, prison, or at least a judge. 

Some have also been quick to suggest that “investors” in a token themed around a blowjob-based meme don’t deserve recourse in the spirit of caveat emptor.

Both overHere and Welch have been quiet since the Spaces concluded, not even willing to answer emails — at least when they come from us.

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The post Questions Haliey Welch and the $HAWK team won’t answer appeared first on Protos.

On August 9, BitGo announced that it was transitioning Wrapped Bitcoin (WBTC) to a new “strategic partnership between BitGo, Justin Sun, and the Tron Ecosystem.”

The announcement continued that this partner would would “continue to provide real-time proof-of-reserves.”

Despite specifically referencing the Tron ecosystem and promising that real-time proof-of-reserves would also continue, WBTC on TRON, as well as WETH on TRON, have been removed from the WBTC dashboard, meaning the proof-of-reserves for this token is no longer available.

The dashboard no longer includes WBTC on Tron but still features the versions on Ethereum, Base, Kava, and Osmosis.

An on-chain review of WBTC on Tron doesn’t show any substantial changes in the supply recently. However, it’s not currently possible to verify the BTC that is meant to collateralize these tokens.

Read more: Coinbase to delist WBTC months after Justin Sun controversy

These changes to WBTC come quick on the heels of Sun-advised HTX redeeming thousands of WBTC it hadn’t previously disclosed.

It’s not clear why WBTC made this change, especially as it continues to advertise on its homepage that it’s “Completely transparent. 100% verifiable.”

This change to not disclosing its backing brings WBTC on Tron in line with Sun-owned Poloniex’s BTC on Tron product. This product is approximately 1,000 times larger than WBTC on Tron, makes up a massive portion of all BTC on HTX, and doesn’t disclose where the backing is held.

Protos has reached out to BitGo, BiT Global, WBTC, and Justin Sun but none responded immediately to questions about why these products were removed from the website.

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The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced that it had sanctioned several individuals and entities related to a money laundering network that relied on tether (USDT), as well as other cryptocurrencies, to move assets for Russian interests. 

The United Kingdom and the United Arab Emirates collaborated with OFAC to disrupt this network, according to the press release.

In total, OFAC has sanctioned five new individuals and four entities that were associated with the TGR Group money laundering network. 

What did this money laundering network look like?

The TGR Group, allegedly controlled by Ukrainian national George Rossi, supposedly provides services exchanging cash for crypto (and vice versa), a pre-paid card service, and helping enable “Russian nationals to purchase property in the United Kingdom.”

The press release also notes that Rossi “leveraged OFAC-sanctioned Russian crypto exchange, Garantex OU, to process USDT transactions after its date of designation.”

Among Garantex’s alleged wrongdoings was processing a variety of transactions that came from the Hydra dark market. 

Read more: Sanctioned crypto exchange Garantex probed over $20B USDT transfers 

TGR Group’s alleged money laundering network relied on a variety of entities across the world, including in Wyoming. Pullman Global Solutions LLC is allegedly more than half owned by Andrejs Bradens.

Bradens, a Latvian national, not only owns Pullman Global but also has ties to other TGR Group entities, such as TGR Corporate Concierge LTD., a firm based in the United Kingdom. 

According to the Treasury press release, Elena Chirkinyan, who is allegedly “a direct subordinate to Rossi,” leads this entity, which holds significant importance for the network. Chirkinyan was previously allegedly involved in transferring funds from RT (formerly Russia Today); apparently this was “likely to support the activities of a UK-sanctioned Russian-language media organization in the United Kingdom.”

Chirkinyan apparently “also arranged cash handovers in which USDT was sent to a cryptocurrency address… and in return cash was received by the TGR group.”

Chirkinyan additionally allegedly worked on the ability for Russian nationals to purchase property in the United Kingdom.

Analysis from CoinDesk suggests that Tether froze approximately $8 million in USDT yesterday. 

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Animoca Brands, the NFT and Metaverse firm, hopes to pass a resolution at its annual general meeting (AGM) on December 23 that would replace its auditor, DFK Collins, with Hall Chadwick. This is according to the distributed agenda. 

Animoca has arguably been slow to file its recent audit reports, not completing its 2020 report until mid-2023. The report included comments from DFK Collins, which noted that for Animoca to “continue as a going concern” would be “dependent upon” it “raising new equity funds as and when required” as well as “support from the convertible note holders.” It would also need to “convert cryptocurrencies into fiat currencies as and when required.”

However, despite these comments, it is important to note that DFK Collins also said that its “opinion is not modified in respect” of these matters.

Read more: Animoca Brands has a web3 portfolio worth $1.5B because it said so

At the time of this audit being published, Yat Siu, Animoca Brands’ executive chairman, noted to the Australian Financial Review that the firm didn’t think these issues were “a going concern issue” and added that Animoca has “a reasonable cash position, a reasonable equity position.” 

Since the audit period covering through the end of 2020, Animoca Brands has continued to raise money, including:

• On May 13, 2021, the company announced that it had completed a capital raise of US$8,888,888.
• On May 28, 2021, the company entered into subscription agreements with “sophisticated and professional investors,” raising US$9.4 million.
• On July 1, 2021, it completed the second tranche in its May 13, 2021 raise, bringing in US$50 million.
• On October 20, 2021, Animoca raised US$80 million from “sophisticated and professional investors.”
• On January 18, 2022, the company announced it had completed a capital raise of US$358,888,888.

An attachment to the AGM agenda notes that Hall Chadwick believes it is “prepared to audit the financial statements for” 2021, 2022, and 2023. 

Siu previously told CoinDesk in September of this year that Animoca was “midway through the audit, which is a critical piece of the IPO puzzle” for the firm, also confirming at the time that DFK Collins was conducting that audit. 

Protos has reached out to Animoca Brands about this desire to change auditors. Animoca Brands was not able to comment on why it had decided to switch auditors, noting, “Unfortunately, due to disclosure requirements, we cannot comment on this prior to the general meeting on 23 December.” Additionally, when asked why DFK Collins was not able to complete the 2021 audit that was in progress, Animoca Brands communicated that “We have noted in the past (including in the Chairman’s Letter in the 2020 annual report that you cited) that the business of Animoca Brands poses complex challenges for financial reporting and auditing. We have completed substantial work towards the audit of the 2021 financials and plan to transition seamlessly to a new auditor with full cooperation between both audit firms.” Furthermore, when asked if this would delay any IPO plans, Animoca Brands noted that it expects “the change in auditors to support Animoca Brands’ plans to list on a public exchange.” Finally, it noted that definitive timelines for the outstanding audits will need to wait as “the shareholder meeting will provide the company with authorization to switch its auditor, at which point the new auditor can formally begin work on outstanding audits with a timeline created.”

Update 2024-12-04 18:20 UTC: To ensure clarity, we have added comments from Animoca Brands, expanded a quote from the 2020 report, and changed the headline.

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HTX, the Justin Sun-advised crypto exchange, has been rapidly redeeming massive quantities of wrapped bitcoin (WBTC). This started on November 24 with HTX redeeming approximately 5,182 bitcoins and has continued with the additional redemption of 2,166 bitcoins on December 1.

Both of these transactions were unusual to observe, given that WBTC has no 24-hour volume on HTX. 

Additionally, there is no WBTC included in the proof-of-reserves for HTX. 

Furthermore, neither of the two bitcoin addresses that these redemptions largely ended up in, 1Fgpaz4kXyz35WKMGk2Yo19mR9pk3KC8zx and 1Apv2EuoHyCpKsxdFEPv5GSddqDMt3bTN6, are included in the proof-of-reserves.

Read more: Justin Sun’s USDD removes 12,000 BTC without DAO approval

Furthermore, the total amount redeemed, approximately 7,300 bitcoin, would represent approximately one-third of all bitcoin included in the HTX Proof-of-Reserves.

Despite these apparent issues with these redemptions, they have been processed quickly by WBTC, each in about five hours. Other WBTC users sometimes need to wait nearly two weeks for their redemptions to process.

This Sun-advised exchange redeeming assets it hadn’t previously disclosed may reignite the controversy around Sun’s involvement in the custody of WBTC. Especially as he has launched hypocritical criticisms at competitors. 

Sun, for his part, has been cozying up to the United States president-elect, purchasing a massive stake in World Liberty Financial, the project endorsed by the sexual predator. Sun is also currently the target of a Securities and Exchange Commission lawsuit that alleges he engaged in wash-trading, price-manipulation, and hired celebrities without disclosure to sell securities he was selling without registration.

Protos reached out to HTX to clarify these issues, but at press, it had not responded. 

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