Taiwan’s Comma3 Ventures Raises $45M Crypto Fund

Well-known crypto exchange HTX and its decentralized autonomous organization (HTX DAO) have restored services following a distributed denial-of-service (DDoS) attack. The attack, which occurred late last week, briefly disrupted operations. However, HTX swiftly addressed the issue, highlighting the robust security protocols in place. The Seychelles-incorporated exchange confirmed the outage on social media last Friday, only to post an update shortly afterwards to confirm that service had been restored.Photo by Tekton on Unsplash‘Funds are SAFU!’Key industry figure and HTX advisor Justin Sun also took to social media to announce the recovery and express gratitude to the user community for their support. He reassured users that all funds remained secure, underscoring the exchange's dedication to safeguarding user assets. Sun borrowed a phrase first coined by Binance founder Changpeng Zhou (CZ), stating:”All funds are SAFU!” Latest in a string of incidentsThis DDoS attack adds to a series of challenges faced by HTX. In September, the same month in which the company rebranded from Huobi to HTX, hackers exploited the exchange, resulting in a loss of approximately 4,999 ether (ETH) valued at $7.9 million. In November, two Sun-linked protocols, HTX and Heco Bridge, experienced a combined $100 million hack. Despite these incidents, prompt measures, including statements from Justin Sun, ensured the protection of user assets. Having originated in 2013, HTX has evolved into a comprehensive blockchain ecosystem, encompassing digital asset trading, financial derivatives, wallets and various other blockchain-related services. The firm maintains offices in Hong Kong, Singapore, Tokyo and the United States. Its South Korean branch is set to close its operations on Jan. 29. Since 2018 the business has been a publicly listed company on the Hong Kong Stock Exchange (HKEX). HTX DAOOnly hours before experiencing this DDoS attack, the firm had launched HTX DAO. The DAO allows users to actively participate in the exchange's operations. Users can contribute to decision-making processes through voting, engaging in community discussions and selecting representatives. The DAO’s whitepaper outlines that governance will be conducted through the use of HTX tokens. The HTX DAO website alludes to various privileges that HTX token holders can benefit from on both the DAO and the HTX exchange. However, it remains unclear as to the specific nature of these privileges as yet. In a bid to strengthen its security infrastructure, HTX DAO recently underwent a comprehensive security audit conducted by ChainSecurity. This integration of the exchange business into the HTX DAO ecosystem reflects a broader trend within the cryptocurrency sector towards decentralization. In a long post on the X social media platform on Thursday, Justin Sun suggested that through HTX DAO, the HTX exchange would become “The People’s Exchange.” Sun added:”HTX currency holders should eventually become the owners of the platform.” Despite the high hopes and aspirations, Sun continues to have his perennial detractors. Travis Kling, founder of Ikigai Asset Management, posted on X on the very same day, stating:”We may be getting close to showtime here. We need [Justin Sun] gone. He’s a cancer.” 

Canaan’s Record Q2 Revenue Amid Profitability StruggleCanaan, a Singapore-based player in the Bitcoin mining sector, has reported a remarkable surge in its Q2 Bitcoin mining revenues, reaching an all-time high of $15.9 million despite continuing to struggle to achieve profitability.The growth, a 43.3% increase quarter-over-quarter, is attributed to the heightened sale of computing power in comparison to Q1, as indicated by the company’s unaudited second-quarter results, which were released on Tuesday.Photo by Rifath @photoripey on UnsplashRevenues boosted by multiple factorsThis surge in revenues was propelled by a range of factors, including the recovery of Bitcoin’s price, amplified computing power, and increased rewards. Notably, Canaan managed to sell 6.1 million TH/s worth of computing power. This marked 44.2% growth when compared with the previous quarter and an 11.7% surge from the same period last year.Despite this surge, Canaan’s overall financial status continues to exhibit challenges in terms of profitability. The company encountered $30.6 million in mining costs during the second quarter, which significantly contributed to a total net loss of $110.7 million for the same period. This net loss reflects a considerable increase from the $84.4 million reported in Q1 and starkly contrasts with the net profit of $90.1 million achieved in the corresponding period of the previous year.Inventory write-downs and impairment chargesThese losses can be attributed to several factors, including an inventory write-down and impairment of property and equipment. Nangeng Zhang, Canaan’s Chairman and CEO, addressed the complexities the company faces in the current market.He noted: “Admittedly, we are still facing a market that has yet to recover with soft purchasing power on the demand front, generating continued pressure on our sales.” Zhang also acknowledged that the company faced challenges stemming from regulatory changes and contractual breaches from a particular partner.Bitcoin mining difficulty and hash rates also proved to be a challenge for Canaan. The Bitcoin network hashrate currently stands at 326.26M by comparison with 226.91M a year ago. An ever higher hashrate is ordinarily a bullish sign for Bitcoin. However, Canaan has to deal with the higher cost of mining even though the Bitcoin unit price has not responded proportionally to meet that all-time high hashrate.While Canaan’s Q2 performance reflected resilience and expansion into new mining projects in Africa and South America, the company’s financial struggles underscore the ongoing volatility and uncertainty in the cryptocurrency space.In terms of cryptocurrency holdings, Canaan disclosed that it held 1,125 Bitcoin with a total carrying value of $28.8 million as of June 30. This inventory included both company-owned Bitcoin and those received from customer deposits. The company also noted an impairment on its cryptocurrency holdings in Q2, amounting to $2.4 million.Looking ahead, Canaan projected its Q3 total revenues to approximate $30 million, acknowledging the persistently challenging market conditions that are prevalent in the industry. The company remains vigilant about its financial outlook as it strives to navigate through the evolving landscape of the cryptocurrency market.In a recent announcement, Canaan unveiled plans to introduce a “groundbreaking, industry-redefining product that will shape the future of Bitcoin mining.” The debut is scheduled for September 12, coinciding with a gala event that commemorates the company’s 10th anniversary.

China’s Crypto Crackdown Reveals Capital Control LoopholesChinese authorities have been stepping up their efforts to crack down on cryptocurrency-related crimes, and with that, uncovering how digital currencies are being used to bypass strict capital controls imposed by Beijing.China may be a few years into a crackdown against the use of cryptocurrencies but despite that, their use and particularly their use for illicit purposes continue. That’s according to a report on Wednesday by the South China Morning Post (SCMP).Photo by Christian Lue on UnsplashCombating capital outflowsThe rising trend of capital outflows has prompted Chinese authorities to take action. Two prominent cases illustrate the extent of these illegal activities and the value of assets seized.In Jingmen, a city in Hubei province, police disclosed details of an online gambling case involving digital currencies used to evade regulation. The case has implicated over 50,000 individuals and a turnover of billions of dollars. Although the specific virtual currency was not mentioned, authorities revealed that they had frozen multiple accounts with a combined value of $160 million.Meanwhile, in Shanxi province, police solved a money laundering case linked to 380 million yuan worth of USDT, the US dollar stablecoin issued by Tether. China’s State Administration of Foreign Exchange is responsible for monitoring cross-border capital flows. Accordingly, it has taken steps to curb these illicit activities. Late last month, it fined ten firms in order to maintain order in the forex market.Digital yuan developmentThese recent cryptocurrency cases have exposed loopholes in China’s capital control system. Crypto mining and trading have long been banned by Chinese regulators. As an alternative, China has been actively developing its own central bank digital currency (CBDC), known as the digital yuan or e-CNY. 2023 has seen a raft of measures taken by various regional administrators throughout China to bring about further e-CNY adoption.However, the ban on cryptocurrencies and the launch of the e-CNY have driven many miners and traders underground or to overseas locations such as Hong Kong, which ironically, is vying to become a cryptocurrency hub. The continued depreciation of the yuan against the US dollar has intensified capital outflow pressures.Chinese bonds sell-offInternationally, fund managers have been selling significant amounts of Chinese securities since 2021. That goes against the current regional trend which sees emerging Asian markets experiencing substantial inflows of funds during the same period, according to the Institute of International Finance.That market activity has been in response to Chinese policies and escalating US-China tensions. An Atlantic Council report highlights that international institutional investors have been net sellers of approximately 1 trillion yuan in Chinese bonds since early 2022.China’s efforts to control capital outflows and stabilize the yuan’s value face ongoing challenges, as cryptocurrency-related crimes persist. While the crackdown exposes weaknesses in the country’s capital control system, it also underscores the difficulty authorities will have globally in trying to control digital currency use.