Digestible news about the latest developments across the fields of Web3, NFT, blockchain and Metaverse in China and beyond, edited weekly by Pandaily.
This week: crypto investor Sequoia Capital China has raised $ 9 billion, Chinese beauty app Meitu has recorded a net loss of up to $ 52.3 million in the collapse of the crypto market, Animoca Brands has Web 3.0 gaming company Planetarium Labs and others. Leads the $ 32 million funding round.
Cryptographic investor Sequoia Capital China raises $ 9 billion
Sequoia Capital China, an affiliate of a crypto-friendly venture capital firm, is trying to raise about $ 9 billion to invest in domestic start-ups despite the impact of Beijing’s Zero-COVID policy and technological crackdowns. increase. Cointelegraph and the Financial Times first reported this story.
- Sequoia China is reported to have exceeded its initial target of $ 8 billion, and the final amount is expected to be the largest capital pool ever raised by venture capital focused on Chinese tech startups. I will.
- Sequoia China is expected to finish the round within a week, with 50% of its funding oversubscribed.
- Sequoia China has invested in a number of crypto companies, including troubled crypto lender Babel Finance.
- Global institutional investors such as the Sovereign Wealth Fund, U.S. University Funds and Pension Funds have withdrawn significantly from Chinese funds over the past year due to regulatory uncertainty, but with Sequoia China and The world’s leading investment institutions such as Hill House are still raising funds.
- In addition to regulatory concerns, global investors are also concerned that investment in Chinese tech startups could be hit by potential fallout from the close relationship between Moscow and Beijing. I am.
- China-focused funds are struggling to raise money from global investors this year, citing data from financial data firm Preqin, to just $ 4.8 billion in the first half of 2022, according to the Financial Times. Was procured. (Cointelegraph, Financial Times)
read more: All our stories about Sequoia China Capital!
Chinese beauty app Meitu records net loss of up to $ 52.3 million in crypto market crash
The most well-known developer of the popular Chinese selfie apps Meitu App and Beaty Cam, Meitu lost up to 154% in the second half of 2010 due to the holding of cryptocurrencies that had been melted down in the last two months. It warns investors that it may expand. Fortune and SCMP first reported this story.
- Hong Kong-listed companies said in a filing last week that net losses in the first half of 2022 could range from $ 41 million to $ 52.3 million, with net losses of $ 20.57 million in the same period last year.
- Meitu has fixed the increased loss of the crash value of crypto assets including 940 Bitcoin and 31,000 Ether. The company purchased assets for $ 49.5 million and $ 50.5 million, respectively, between March and April 2021.
- The purchase was made weeks before Chinese regulatory authorities banned the trading of cryptocurrencies by financial institutions and settlement companies in May 2021. The Chinese government has since expanded its crackdown to include all transactions, including cryptocurrencies.
- Meitu hasn’t bought or sold cryptocurrencies since China’s latest cryptocurrency ban, the company said in a filing.
- According to Fortune, Meitu is one of the world’s top holders of cryptocurrencies and ranks 12th among listed companies around the world. Coin Geck.
- The recent plunge in the crypto market has been fueled by a sharp rise in US interest rates, which has led to fear of a recession and the sale of crypto.
- Meitu fell 10.6% to 93 HK cents in trading on Monday, but the company argued that if the crypto market recovers, losses would “not have a significant impact” on cash flow. (Fortune, SCMP)
Animoca Brands Leads Web3 Gaming Company Planetarium Labs $ 32 Million Fundraising Round
Planetarium Labs, a community-led blockchain game builder, has raised $ 32 million in a series A round led by Animoca Brands. CoinDesk and VentureBeat first reported the story.
- Krust Universe, WeMade and SamsungNext also participated in the funding round. Krust Universe is the investment arm of South Korean high-tech conglomerate Kakao, and WeMade is the publisher of the Play-to-Earn game Mir4.
- Planetarium Labs uses revenue to build a network with tools for game and player governance. Co-founder and CEO Kijun Seo emailed CoinDesk.
- The planetarium game ecosystem is built on Libplanet, a software development kit for creating distributed online games.
- Libplanet technology is used in the open source online role-playing game Nine Chronicles. The game has over 300,000 users and backers such as Animoca Brands, Binance Labs and Ubisoft.
- “We strongly believe that the future is a large, decentralized world of open metaverse, so we are pleased to support Planetarium Labs’ vision of a community-centric blockchain game that gives players creative freedom and full digital rights. I think, “Yat Siu, founder and CEO of Animoca Brands, said in a statement.
- Animoca Brands is a Hong Kong-based game software developer and venture capital firm. As of the end of April, its portfolio investment totaled over $ 1.5 billion with 340 investments. (CoinDesk, VentureBeat)
read more: Read all the stories of Animoca Brands!
Payroll with tether determined to be illegal in China
The Chaoyang People’s Court in Beijing, citing a report from the local news agency Beijing Daily, ruled that stablecoins like USDT cannot be used to pay salaries.
- The news came months after China banned cryptocurrencies altogether in September and all transactions, including cryptocurrencies, were banned.
- Chinese courts say cryptocurrencies like USDT cannot be marketed as currencies and require all employers to pay workers using the national official renminbi (RMB). Did.
- The ruling was issued as part of a proceeding in which an employee of a blockchain company sued the employer for paying salaries and bonuses in USDT instead of RMB.
- Citing China’s total cryptocurrency ban, the court stated that digital currencies like USDT do not enjoy the same status as fiat currencies. Therefore, the court ordered the defendant to pay the plaintiff more than RMB270,000 ($ 40,000) in wages and bonuses.
- Tether USDT is the leading stablecoin fixed to the US dollar in a 1: 1 ratio. This is supported by US Treasury reserves, cash deposits, and dollars held in other assets. (Cointelegraph)
CryptoExchangeCoinFlex plans to recover $ 84 million
CoinFlex, a small cryptocurrency exchange focused on derivative trading, said it has taken legal steps to recover a $ 84 million loss from a single customer. Bloomberg and Mint first reported the story.
- The company also said it is considering a joint venture with another crypto company to recover its losses.
- CoinFlex stopped withdrawing from the platform last month because long-time investor Roger Ver was unable to repay $ 47 million from margin calls.
- Margin calls are collateral that holders of financial instruments (such as cryptocurrencies) must deposit with a counterparty (such as a securities company) to cover some or all of the risks they pose to the counterparty.
- “Individuals first asked us to liquidate their accounts, but for some time they continued to say they wanted to send large sums of money to the exchange to physically transfer futures positions.” And CoinFlex co-founders Sudhu Arumugam and Mark Ram wrote in a Saturday post without mentioning Ver’s name. “It’s now clear to us that he wasted time and wanted a bounce in the market that never happened.”
- The news was in the midst of a crypto market crash that wiped out nearly $ 2 trillion of cryptocurrencies.
- CoinFlex has revealed plans to raise sufficient external funding with USDC, a stablecoin fixed to the US dollar, to ease liquidity tightness and resume withdrawals. (Bloomberg, mint)
Hong Kong Securities Regulator Ashley Alder Leads UK Financial Conduct Authority
Ashly Alder, CEO of the Securities and Futures Commission (SFC) in Hong Kong, will be the next chair of the Financial Conduct Authority (FCA) in the United Kingdom from January 2023. CoinDesk and Cointelegraph first reported this story.
- Alder will replace Richard Lloyd, the interim FCA chairman who took office after Charles Randell resigned in May.
- In 2020, the FCA became the UK’s authority to prevent money laundering and combat terrorist financing, keeping crypto companies within its scope.
- Former lawyer Alder has been leading Hong Kong’s securities regulators since 2011. He oversaw the implementation of digital asset rules in the region and also chaired the International Organization of Securities Commissions (IOSCO).
- Hong Kong is one of the freest economies in the world when it comes to traditional finance. However, the same rules do not apply to cryptography.
- Industry stakeholders are concerned about the long-term potential of the region given Beijing’s growing influence.
- In addition, strict Virtual Asset Service Provider (VASP) rules in the region prohibited individual investors from investing in this space.
- When accepting a new position, Alder helps the financial watchdog “draw the UK’s post-Brexit future as a global financial center that continues to support innovation and competition through its own world-leading regulatory standards.” He said he wanted that. (CoinDesk, Cointelegraph)
That’s it for this week’s newsletter – Thank you for reading! As always, we welcome your feedback on how to make this newsletter better.Please write to us [email protected].. See you next week!