Binance Hits 150M Users

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Good Morning,

ZK is the hot new girl in town. Having trouble raising money? Add “zk tech” in your deck and you’ll get a $100M valuation.

That said, open-sourceness can be a double-edged sword. Matter Labs, the firm behind zkSync refuted Polygon’s allegations that his firm has copied Polygon’s open-source code without proper attribution.

Let’s close the week with some drama.

In Today's Email:

• What Matters: Binance 150M users vs DOJ ⚖️

• Founders-Investors Highlight: David Malka of Truffle VC 💼

• Deal Flows: $1.5B Haun Ventures strategy 🔎

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WHAT MATTERS

Binance Reaches 150M Users Amidst DOJ Scrutiny

State of play: Binance’s CEO claimed that Binance has surpassed 150M registered users despite the ongoing legal crackdown in the US and Europe.

• Binance's user base was 128M in May, and within a span of three months, it remarkably grew by an additional 22M users.

• CZ also announced that Binance has officially re-entered Japan and secured a license in Dubai.

• Binance remains the world's largest crypto exchange, holding nearly 65% market share in spot trading volumes.

Binance is under investigation in France, it has also exited the Netherlands, deregistered entities in Cyprus and the UK, withdrawn its Austrian license application, and faced an order to cease operations in Belgium.

• In the US, Binance faces CFTC allegations of operating an "illegal" exchange and a "sham" compliance program, along with an SEC lawsuit for violating securities laws.

• The Department of Justice is considering fraud charges against Binance but is concerned that it could trigger a rush on the exchange and harm its users.

Why it matters: The increase in users on Binance shows that Asia has an outsized user base in crypto. Here are the top 5 countries with the most crypto owners:

1. India (93M).

2. China (59M).

3. USA (48M).

4. Vietnam (20M).

5. Pakistan (15M).

For builders: If you are aiming to attract crypto-native users, remember that Asia still has the largest user base and less antagonistic regulatory agencies.

For investors: Despite Binance’s growth in Asia and MENAS, please manage your counterparty risks appropriately and don’t repeat the same mistakes that many funds made with FTX.

• Use proper custody-specialist firms with strict regulations around the segregation of funds.

BUILDER-INVESTOR HIGHLIGHT

David Malka, Founder of Truffle Ventures

David Malka is the Founder and CEO of Truffle.vc, an early stage crypto and web3 VC fund that offers projects access to their audience of 100,000+ crypto native users.

• David has been fascinated with blockchain technology since 2015 and became obsessed to it during the DeFi Summer in 2020.

• David founded Yieldfarming.com, the origin of Truffle.vc, in 2020 to help educate investors together with leading DeFi experts.

• David founded Truffle.vc with Adam Spivack.

Previous backgrounds: David studied at UCLA from 2009-2011.

• He was an equity trader from 2006-2013 and founded Better Vacations, a tech-enabled real estate fund with ~$250M AUM that was merged with Five Star Property.

The big idea: Through Truffle.vc, David aims to help everyday investors gain access to early stage crypto investment opportunities.

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

65% Bitcoin ETF Approval Odds

James Seyffart and Eric Balchunas, two experts on ETF from Bloomberg, predict that Bitcoin ETF approval odds is increasing to 65% from 50%.

Here is why they are optimistic that Bitcoin ETF will be launched this year:

• Gensler is downplaying his role at SEC.

• SEC implicit approval on Coinbase’s Bitcoin exchange.

• The SEC lost a Grayscale-related case regarding treatment of futures ETF.

• Pressure from BlackRock and Democrats.

• If Greyscale win over SEC in Fed court, it could set a wave of approvals in 4th quarter this year.

DEAL FLOWS

Running a $1.5B Crypto Fund in Crypto Winter

Deal flows slowed down significantly this week — perhaps we can blame it on Summer holiday 📉 — we saw $15M+ in deals.

Haun Ventures rasied $1.5B and launched in the spring of 2022, where things went and continued to be sour for crypto space.

• According to a fundraising document, Haun had promoted a deployment timeline of approximately 2 years but now plans to take around 3 years to spend its cash.

• As of mid-June, about 30% of the firm's capital was deployed across two dozen positions.

• The firm has also been investing in publicly traded tokens.

Deal flows in the past week:

• Rep3, Undisclosed $ Pre-Seed Round

• Terminal 3, Undisclosed $ Pre-Seed Round

• Hashport, $8.5M Series C Round

• Orbital, $6.3 Venture Round

• Conic Finance, $1M Private Round

QUICK BITES

• Coinbase beats Q2 revenues.

• SBF faces jail as DOJ pushes for incarceration.

• Cash App reports $2.4B in Q2 Bitcoin sales.

• Bitfinex hacker pleads guilty.

• DOJ worries fraud charges will cause run on Binance.

• Hong Kong awards first exchange license to HashKey

• Binance listing fee-free Bitcoin trading pair for First Digital USD.

• Direxion joins crypto ETF race.

• Coinbase plans Friday filing to seek dismissal of SEC's case.

• Michael Egorov sold 72 million CRV tokens in OTC deals.

MEME & NOTEWORTHY READS

• Decentralised’s read on the narrative wedge.

• Ann’s read on no money no sense.

• Polygon’s read on protecting the on-chain ethos.

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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.