Kyber Hacker Wants to Takeover the Protocol

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Good Morning. Crypto markets are up as we break $1.5T in total market cap. Market sentiment seems to be shifting into Solana and other alternative L1s as people get frustrated with 25 different L2s and the increasingly expensive EVM gas fees.

In Today's Email:

• What Matters: Kyber hacker demands 📝

• Founders Highlight: Kenneth & Dominika of Toku 💡

• Deal Flows: Wormhole $225M raise ⭕

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WHAT MATTERS

KyberSwap Hacker Demands Full Control

State of play: The hacker behind the $47M exploit from KyberSwap has demanded full control over the Kyber protocol and company in a bizarre on-chain message.

• The hacker labeled their demand as the "best" and "only" offer, setting a deadline for Kyber until Dec. 10.

• The hacker's demands comprise full control over the company, "temporary" governance control of KyberDAO for legislative changes, and access to all information related to the company and protocol.

• They also seek the surrender of on-chain and off-chain assets, including shares, equity, KNC, other tokens, websites, servers, passwords, code, social channels, and intellectual property.

• The hacker intends to buy out company executives at a fair valuation if the demands are met.

• The hacker also said remaining employees would have their salaries doubled, and those not wanting to stay would receive a 12-month severance package.

• LP who deposited assets into KyberSwap's pools would receive a 50% rebate on losses from recent market-making activity, according to the attacker, who commented that it was "more than you deserve."

• The hacker issued a warning that any contact by agents from any of the 206 sovereignties regarding their activity would void the deal, and rebates would be reduced to zero.

Why it matters: KyberSwap initially offered a bounty for the hacker to return 90% of the stolen funds, in return, the hacker is now demanding 100% ownership of the company instead.

• Marco’s comment: rumors on the street are that this hacker is the same genius kid that has exploited other protocols before, and is trying to argue that code is law

For builders and investors: (1) Security is paramount; (2) Never negotiate with a delusional actor.

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BUILDER-INVESTOR HIGHLIGHT

Kenneth & Dominika of Toku

Kenneth O'Friel and Dominika Stobiecka are the co-founders of Toku, the global solution for token compensation and tax compliance.

• Kenneth O'Friel and Dominika Stobiecka are featured in the Forbes 30 Under 30 Japan and North America Awards.

Previous backgrounds: Kenneth worked as an Associate at Bank of America from 2016 to 2020.

• He studied at Millbrook School from 2009 to 2012 and pursued his undergraduate studies at Bates College from 2012 to 2016.

Dominika previously worked in fixed-income at Deutsche Bank from 2017 to 2018 and spent almost 2 years as a researcher at the Federal Reserve Bank of Chicago and the European Central Bank.

• Dominika earned a BSc in economics, finance, and management from QMUL and has a master's degree in Economics from Keio University and Sciences Po.

The big idea: With Toku, Kenneth and Dominika aim to streamline and bring token compensation into the mainstream.

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INSIGHTS

MicroStrategy Buys $593.3M in Bitcoin

MicroStrategy, the leading corporate holder of Bitcoin, has bought 16,130 BTC for $593.3M

• MicroStrategy bought the 16,130 BTC with an average price of $36,785 per token according to its 8-K form to the SEC.

• MicroStrategy Founder and Chairman Michael Saylor announced on X that the company now "hodls" 174,540 bitcoins acquired at an average price of $30,252 each.

• MicroStrategy is considering raising up to $750M by selling more Class A common stock.

DEAL FLOWS

Wormhole Raises $225M at $2.5B Valuation

Deal flows soared this week 📈 — we saw $255M+ in deals.

Wormhole announced on Wednesday that it secures $225M at a $2.5B valuation, marking the largest crypto project funding in 2023, as per Crunchbase's Web3 tracker.

• CEO Saeed Badreg notes that the raise was technically its first.

• There is no lead investor in Wormhole's $225M funding round; participants include Brevan Howard, Coinbase Ventures, Multicoin Capital, ParaFi, Dialectic, Borderless Capital, Arrington Capital, and Jump Trading.

• The investors’ stake will consist entirely of token warrants, rather than equity in the company

• Capital injection and Wormhole Labs debut solidify the split from Jump Crypto, as confirmed by COO Dan Reecer: "Wormhole is now completely separated from Jump."

• The Wormhole team, with 10 more at the Wormhole Foundation, plans to use the capital to expand, enhance the protocol, and attract developers to leverage its messaging technology.

Deal flows in the past week:

• MYX, $5M Seed Round

• Setter, $5M Seed Round

• Coinchange, $10M Series B

• Wormhole, $225M Token Round

• Open Campus, $3.15M Unknown Round

• Wind, $3.8M Unknown Round

• Acctual, $3.85M Unknown Round

• Farcana, Undisclosed $ Strategic Round

• TON, Undisclosed $ from Animoca Brands

QUICK BITES

• Coinbase stock triples in 2023.

• MicroStrategy buys $593.3M in Bitcoin.

• Polygon had a secret deal with DraftKings.

• Swiss crypto bank SEBA rebrands to AMINA.

• Circle clarifies that it doesn’t service Justin Sun.

• HK Securities Trade Group proposes an ICO portal.

• Treasury seeks expanded sanctions powers in crypto.

• FTX approved to start selling $744M in Grayscale assets.

• Copper launches a trading platform for tokenized securities.

• Philippine Regulators move to block access to the Binance.

• $343M was lost to crypto hacks and fraud cases in November.

• Binance enters into a triparty agreement to help institutional investors.

NOTEWORTHY READS

• L2BEAT’s read on L2 transactions time to finality.

• Accelxr’s read on comparative analysis of decentralized social.

• Transliminal Musings’ read on navigating the wallet-as-a-service landscape.

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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.