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Tron founder and Huobi “advisor” Justin Sun said Li Wei, the younger brother of Huobi founder Li Lin should never have received millions of Huobi’s native tokens for free, nevermind profiting by selling them now. The price of HT tokens has tumbled over the past month.

Wei received the token when HT was initially distributed and he has been “consistently selling off” and cashing out since April, Sun tweeted today. “Now, the HT DAO committee is stepping in to rectify this issue.”

By rectifying, Sun means Huobi plans to engage with Wei “to negotiate a refund and arrange for the destruction of his remaining HT tokens.” This action will be “not only a matter of justice but also serves the best interests of everyone in the HT DAO community.”

When asked why Wei got the tokens in the first place and if he played or is playing a role at Huobi, Sun told The Block “he has no role” and that he got the tokens “just because of brotherhood.” The HT token was launched in 2018.

Sun said Wei started selling HT tokens recently and has sold 2.37 million HT for 7.45 million USDT, citing exchange data on Huobi. When asked how many tokens Wei has in total, Sun said, “We don’t have the number since it was a long time ago but max few million HT.” 

Wei should return the USDT, Sun said, adding that he should never have been given any HT. “We believe in fairness and the importance of rewarding those who genuinely contribute to the growth and development of HT DAO,” Sun said.

Wei and Lin could not immediately be reached for comment.

Huobi stake sale

Huobi recently announced its stake sale, saying that “the controlling shareholder” of the company had agreed to sell its stake to Hong Kong-based investment company About Capital Management’s M&A fund.

While Huobi did not name the controlling shareholder, the news came after reports that claimed Lin was seeking a buyer for his nearly 60% stake in the company and was asking for at least $1 billion. Huobi did not disclose the terms of the deal with About Capital Management.

Sun told The Block at the time that he is only an advisor to Huobi and not a stakeholder. Nonetheless, Sun has been leading decisions at Huobi, recently unveiling a plan to reestablish Huobi as one of the world’s biggest exchanges — with part of it hinging on establishing a hub in the Caribbean.

Lin founded Huobi in 2013 in China. The exchange operator exited its China business in 2021. Now under new ownership, Huobi plans an international expansion.

The price of the Huobi (HT) token

The price of HT is down more than 30% over the past 30 days but has recovered a bit following Sun’s tweets. HT is currently trading at around $3 and has a market capitalization of about $470 million, according to CoinGecko data.

Huobi (HT) token price, source: CoinGecko

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Celsius has begun withdrawing hundreds of millions of dollars worth of ether from Lido Finance. 

The developments come just hours after the bankrupt firm moved nearly $800 million worth of staked ether (stETH) tokens, and following Lido Finance’s upgrade that allowed for such transactions. Once withdrawn, Celsius will receive the underlying ETH in exchange for the stETH tokens. 

Blockchain data indicates that Celsius has initiated withdrawal requests for 240,000 stETH worth roughly $437.7 million as of the time of writing.

Celsius still holds an additional 188,000 stETH tokens, worth about $342 million, that can be redeemed.

As The Block’s Vishal Chawla wrote earlier Tuesday, Celsius dealt with liquidity problems last year in connection with its ether staking operations. The withdrawn ether may be used as part of the platforms’ restructuring and creditor repayment efforts.

Celsius owes creditors $4.7 billion.

In March, Celsius moved to convert wrapped bitcoin (wBTC) tokens into bitcoin. 

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The Bedrock hard fork, proposed earlier this year and approved by the Optimism community in April, is supposed to bring a “new level of modularity, simplicity and Ethereum equivalence.”

Higher fees on Ethereum and Bitcoin may be good news for Solana, where the average number of new daily addresses has surged to the highest level in almost a year.

The Layer 1 network saw the seven-day moving average of new addresses hit 304,640 on Monday, the highest number since June 2022, according to data from The Block.

More new addresses have already been added in the first half of May than protocol saw in the entire month of April, the data shows. The surge came as transaction fees on both the Ethereum and Bitcoin networks saw 3-month highs last week.

The number of active addresses that have sent or received funds on the Bitcoin network, meanwhile, has fallen to the lowest level since July 2021.

Solana use rose amid Ethereum finality issues

“The increase seemed to start earlier in May when fees started rising on Ethereum and had people looking for other places to transact, but that second rally could also be tied to the Ethereum finality issues,” The Block research analyst Rebecca Stevens said, noting that a similar rise in new addresses was occurring across Ethereum-scaling platforms such as Polygon.

“Solana has faced a lot of pushback over its outages, so the recent Ethereum network troubles could be putting things in perspective,” she added, referring to two incidents last week that saw Ethereum’s beacon chain briefly stop finalizing blocks.

Solana’s native SOL token, which saw dramatic declines last year amid the collapse of the FTX crypto exchange, has staged a recovery since, rising 109% year-to-date. While it fell 0.9% on Tuesday to $20.78, it’s up 0.6% this week, according to data from TradingView.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The five major crypto firms that collapsed last year — FTX, Celsius, Voyager, BlockFi and Genesis — did so because they offered customers instant withdrawals while their assets were locked inside illiquid, risky investments in an attempt to generate unsustainable yields. And because customers were able to withdraw their funds instantly, often via their phones, the speed of the runs was historic, according to a study by Radhika Patel and Jonathan Rose of the Federal Reserve Bank of Chicago.

“It’s not as if customers had lined up in person, as in the classic movie ‘It’s a Wonderful Life,’” their report says. Or indeed, as in the collapse of Northern Rock in the UK in 2008, when customers also lined the streets to pull out their cash.

The report depicts the collapses graphically, giving readers a better idea of the scale and speed at which $46.5 billion in value was caught up in bankruptcy proceedings – much of which to never been seen again. 

The crypto collapses affected 4.3 million users in total

They were being offered interest yields typically of 7.4% to 9%, but sometimes as much as 17% — all unrealistic in a low interest-rate environment.

Celsius and Voyager both survived initial runs only to succumb later 

Both Celsius and Voyager were hit by two bank runs. The second runs were smaller but by that time their balance sheets were so fragile they collapsed.

FTX’s $7.8 billion run dwarfed all the others. But in each case, the percentage of outflows was less than 40% of liabilities before the run.

The FTX collapse was 7X the size of those before it

This timeline shows FTX on a separate graph because the scale of the withdrawals is so much larger than the others. FTX reported outflows of 37% of customer funds, almost all of which were withdrawn in just two days.

Voyager and Celsius both succumbed to the collapse of stablecoin TerraUSD and the implosion of hedge fund Three Arrows Capital (3AC). They had loaned money to 3AC but not collateralized the loans, the Chicago Fed said.

BlockFi and Genesis were done in by FTX.

The little guys got hurt the most

The Chicago Fed says large institutional investors were fastest to pull their money from failing exchanges, leaving smaller players holding the bag. 

“While the platforms had many retail clients, the runs were spearheaded by customers with large holdings, some of which were sophisticated institutional customers… The owners of large-sized accounts, with over $500,000 in investments, were the fastest to withdraw and withdrew proportionately more of their funding. In fact, during this run, 35% of all withdrawals at Celsius were by owners of accounts with more than $1 million in investments, according to our estimates,” the report says.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

OETH is a yield-bearing, ether-pegged token, offering an easy way to maximize yield from ETH staking using protocols such as Curve Finance.

Executives of Nasdaq-listed semiconductor firm Silicon Laboratories participated in the round.

The browser-extension wallet is using Ledger’s security infrastructure to help users navigate decentralized applications while keeping their assets safe.

River Financial, a startup offering a range of Bitcoin-linked financial services, raised $35 million in a Series B round.

The fundraise was led by Kingsway Capital, with billionaire investor Peter Thiel, Cygni, Goldcrest and Valor Equity Partners all participating, according to an announcement. River did not disclose a valuation. It last raised capital in March 2021, when it secured $12 million in a round led by Goldcrest.

Headquartered in Columbus, Ohio, River offers a range of Bitcoin-related services, including a brokerage with zero-fee recurring orders, custody, mining and a wallet that supports on-chain and Lightning Network transactions. It also has an enterprise API that helps companies plug into the Lightning Network — a service relied on by El Salvador’s Chivo Wallet, among others.

“We’re seeing another wave of Bitcoin interest, largely driven by business and institutional adoption,” Alex Leishman, River’s CEO, said in the statement. “It’s not hype this time. This year’s bank failures and bailouts have been a wake-up call, revealing the cracks of the traditional financial system and reminding us why Bitcoin is so important — it’s a secure path to a stronger and more transparent global economy.”

Banks in crisis

A string of bank crises in the U.S. earlier this year — among them the collapse of crypto-friendly outfits like Signature Bank, Silvergate Bank and Silicon Valley Bank — has contributed to a resurgence in the price of bitcoin. Bitcoin has risen from $16,500 at the start of the year to around $27,000 today, according to CoinGecko data.

River today employs 45 people full-time. The startup plans to use the funding injection to expand its consumer offering, as well as its Bitcoin banking solutions, Leishman said in an email. It will also continue to invest in its mining and Lightning infrastructure products.

“By focusing on Bitcoin, we are able to go deep into things like mining and Lightning that multi-coin crypto companies cannot,” he added.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Auradine, a tech startup co-founded by a serial entrepreneur with a track record of building billion-dollar companies, raised a sizable $81 million in its initial funding round for the development of “next-generation web infrastructure.”

Celesta Capital and Mayfield co-led the Series A round, with Sriram Viswanathan, founding managing partner of Celesta, and Navin Chaddha, managing director of Mayfield, joining the Auradine board. Other investors included Marathon Digital Holdings, Cota Capital, DCVC, and Stanford University, Auradine announced Tuesday.

Auradine skipped the seed-stage of the typical fundraising cycle, its co-founder and CEO, Rajiv Khemani told The Block in an interview. The Series A round was a mix of equity ($71 million) and a line of credit ($10 million), Khemani said, adding that no token element was involved.

The $81 million is a significant sum, exceeding the typical Series A round, but Khemani said that given the uncertainty in the economy, Auradine chose to raise extra money to ensure it is fully funded and can execute product plans. He said the Auradine team’s track record helped grab the mega funding round despite challenging market conditions.

Auradine was founded early last year and closed the Series A round before the FTX exchange collapsed, according to Khemani.

Auradine declined to comment on the valuation with the funding, but a source with direct knowledge of the matter told The Block that the startup is now valued at more than $500 million.

Behind Auradine: A serial entrepreneur and former Palo Alto Networks executives

Auradine is a Silicon Valley, California-based startup co-founded by three tech veterans — Khemani, a serial entrepreneur who previously built and worked at startups and sold them for billions of dollars; Barun Kar, an employee number 10 of Palo Alto Networks who spent over 15 years at the cybersecurity giant that is listed on Nasdaq and has a market capitalization of over $58 billion; and Patrick Xu, who also spent nearly 12 years at Palo Alto — before co-founding Auradine with Khemani and Kar.

Auradine is Khemani’s fourth tech startup in the infrastructure space. His first startup, NetBoost, was acquired by Intel for $$225 million in 1999, Khemani said. His second startup, Cavium, where he was chief operating officer, was acquired by Nasdaq-listed Marvell for $6 billion in 2018. His third startup Innovium was also acquired by Marvell for more than 1.2 billion in 2021.

He now aims to replicate that success with Auradine. “Our goal is to build an enduring and iconic company in the infrastructure space for the next-generation web,” he said. New technologies, including blockchain, AI and privacy, are poised to make a “multi-trillion-dollar impact on the global economy,” Khemani added.

To that end, Auradine is building software, hardware and cloud solutions “to enable a highly scalable, sustainable and secure infrastructure.”

Auradine will initially focus its products around top Layer 1 blockchain networks focused on improving their performance and security, Khemani said, without giving specific details at this stage. Its first products are expected to launch during the summertime.

There are currently around 40 people working for Auradine and Khemani is hiring for several roles.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.