Binance Crisis: Top Executives Resigned

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Good Morning,

Crypto markets are slightly down as hawkish Fed minutes and worsening job data fuel rate hike fears. The balance remains to be seen — can a spot ETF approval overcome rate hike fear and Binance’s crisis?

In Today's Email:

• What Matters: Binance crisis ⚠️

• Founders-Investors Highlight: Jai Bhavnani of Waymont 👨‍💻

• Deal Flows: $2.34B in Q2 funding 📉

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WHAT MATTERS

Management and Strategic Crisis in Binance

State of play: Binance is in full-on turmoil after top executives resigned this week over CEO Changpeng Zhao’s handling of the DOJ investigations.

Among others who resigned are:

• Hon Ng, General Counsel

• Patrick Hillmann, Chief Strategy Officer

• Steven Christie, Compliance SVP

• Matthew Price, Head of Binance’s Global Investigations and Intelligence

Binance is already the subject of regulatory lawsuits filed by the SEC and the CFTC.

Speculations have been circulating that the Justice Department is on the verge of filing a criminal complaint against both the company and Zhao.

Why it matters: Binance is the biggest CEX in the world holding 50%+ of global crypto markets liquidity — further negative sentiments towards Binance will hurt the market in the short-term.

• In recent months, Binance’s market share has begun to decline.

• Several banks in the US and Europe have cut off their Binance relationship

For builders: We’re at an inflection point in crypto (google it).

• During such movements, founders need to be able to capitalize on the changes and find PMF for the next cycle.

For investors: It makes sense to look towards MENASA, EU, and Asia for crypto investments in the next year.

• There might be an opportunity to invest in tier 2 exchanges with good brand names, that have adopted good compliance and excellent strategic directions.

BUILDER-INVESTOR HIGHLIGHT

Jai Bhavnani, Co-founder & CEO of Waymont

Jai Bhavnani is the Co-founder and CEO of Waymont, a self-custody platform geared toward crypto natives.

• Waymont Private Custody is a complete, transformative self-custody solution built for high net-worth individuals (HNWIs).

• Waymont is creating Vaults secured by transaction policies, biometric authentication, and a hassle-free recovery system.

• Waymont Vaults is available in three versions: Waymont Mobile, Waymont Extension, or Waymont Web.

Previous backgrounds: Prior to Waymont, Jai created Rari Capital, a decentralized lending and borrowing platform.

• Under his leadership Rari Capital expanded to a team of 10+ and a community of 10,000+, managing over $1.5B in AUM.

• Prior to Rari Capital, Jai developed Ambo, a crypto wallet with a built-in DEX. In 2019, blockchain conglomerate MyCrypto acquired Ambo and he became its VP of Strategy.

The big idea: Waymont is trying to solve major issues surrounding self-custody such as hacks, physical threats, inheritance planning, hardware failure, recovery plans, and many more.

• Waymont plans to do this in a crypto-native way that enables users to still get access to the DeFi markets and can seamlessly move their funds.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 100 smart crypto investors' wallet addresses 👇

INSIGHTS

Celsius Swaps Altcoins for BTC and ETH

@lookonchain shared their findings on Celcius' move to swap altcoins for $BTC and $ETH.

• The majority of altcoins have been moved to the wallet "0x4131".

• Celsius has transferred 1393 StaFi ($rETH) to Wintermute Trading and received 1393 $ETH.

• Celsius is holding ~$164.5M of altcoins on the EVM chain.

The ~$164.5M of altcoins include:

• $CEL - $100.8M;

• $LINK - $19.9M;

• $AAVE - $7.36M;

• $SNX - $6.2M;

• $TGBP - $5.49M;

• $PAXG - $3.45M.

DEAL FLOWS

Crypto Capital Flow in Q2 2023

Deal flows slowed down because of the holiday weekend 📉 — we saw $14M+ in deals.

Deal flow in the first half of 2023 in crypto continued to grow more scarce. Investments in the industry experienced a decline for the fifth consecutive quarter since Q1 2022, only reaching a total of $2.34B in Q2.

The second quarter’s $2.34B tally was raised across 382 deals, but it is a stark decline from the $12.14B peak the industry hit in the first quarter of 2022.

• The biggest raises during Q2 2023 were LayerZero’s $120M Series B round and Worldcoin’s $115M Series C round.

Deal flows in the past week:

• Wynd, $1M Pre-Seed Round

• Web3Go, $4M Seed Round

• Ola, $3M Seed Round.

• CryptoQuant, $6.5M Series A Round

QUICK BITES

• Binance Senior execs quit over CZ response to DOJ investigation.

• Daniel Friedberg caught up in FTX’s fallout.

• Taylor Swift agreed to $100M FTX deal, but the exchange bailed.

• Multichain Bridge experienced $130M outflows.

• Circle launches wallet-as-a-service developer platform.

• CFTC concludes Celsius and its ex-CEO broke rules.

• BlackRock’s Fink sees Bitcoin as digitizing gold.

• Binance seeks EU Policy Officer.

• Circle considers issuing stablecoin in Japan.

MEME & NOTEWORTHY READS

• Arthur Hayes’ read on crypto, AI, and state of the market.

• Balaji’s read on bond crisis.

• Electric Capital’s read on developer report update.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.