Does 5ire, ‘India’s 105th unicorn,’ stand up to scrutiny?

In Token Issue this week, we look at what happened with 5ire, which went from being a new unicorn to seeking a new investor to take over the round. [Read from your browser]( Token Issue Welcome to Token Issue! Delivered every Friday, this free newsletter breaks down the biggest stories in Asia’s crypto scene and beyond. View past issues [here]( or [sign up here]( to receive future newsletters. Written by Scott Shuey Crypto journalist Hi {NAME} Back in 2018 when I was still podcasting, I correctly predicted the Bitcoin - which was crashing at the time - would land somewhere around US$3,000. It was not a popular opinion. One of my fellow podcasters believed that Bitcoin would rebound to US$50,000. I’ll tell you no lies: it was a guess on my part. But looking back, I realized that at the time Bitcoin was crashing, the US Federal Reserve had started raising interest rates after keeping them at or near 0% for almost a decade. The correlation isn’t exact, but it is pretty close. Then in April 2020, the Fed reversed course and dropped rates back to 0% and kept them there for almost two years. The cryptoverse boomed during that time. Hmm. Now that rates are climbing again, we’re going back into a crypto winter. This isn’t a coincidence. It’s time for another unpopular opinion: The explosive growth of crypto may have been a bubble caused by the Fed, just like the subprime bonds. No, I’m not saying this is the end of crypto, but the days of the Fed’s easy money lending policies are almost certainly over. Bonds and other derivatives will rebound and compete directly with crypto, so the heyday of wild token speculation and easy yields is probably over. Platforms and protocols that hope to survive the crypto winter will need well-thought-out applications and solid business plans. And that brings us to today’s two-part Big Story. [5ire]( a blockchain company that few had ever heard of a year ago, rocketed to unicorn status in July. On closer inspection, the deal seems doubtful, given it hasn’t yet launched a product or gotten significant traction. Meanwhile, 5ire’s advisors have also been raising questions about some of its actions. There are also many ambiguities about the sole investor for its series A, [Sram & Mram Group]( and 5ire even appears to be now pulling away from it. For any startup looking to survive the crypto winter, this two-parter is a must-read. – Scott  ---------------------------------------------------------------  THE BIG STORIES 1️⃣ [Part One: Scrutinizing the $1.5b valuation of 5ire, ‘India’s 105th unicorn’]( 2️⃣ [Part Two: Exodus of advisors at 5ire, India’s meteoric ‘105th unicorn’](  Becoming a unicorn is a rare feat for startups. But that’s what 5ire, the developer of the 5irechain, said it achieved when Sram & Mram - a virtually unknown company in the cryptoverse - offered the blockchain startup a US$100 million investment in a series A round that pushed its valuation to US$1.5 billion. But only three months later, 5ire is looking for new series A investors. The company now appears to want out after questions about Sram & Mram and its CEO, [Sailesh Lachu Hiranandani]( began to crop up. But deals are deals, as Elon Musk recently discovered when he tried to [back out of buying Twitter](. It’s too early to tell how 5ire's series A switcheroo will end, but startups hungry to raise capital shouldn't miss the tale of how these two companies got to this point.  --------------------------------------------------------------- ⭐ TO THE STARS A look at what’s pushing Web3 forward 1️⃣ All your ethereum belongs to us [US SEC claims all of Ethereum falls under its jurisdiction]( The cryptoverse was in a bit of a tizzy over this earlier in the week when a single paragraph - [(the 69th)]( in a lawsuit brought by the Securities and Exchange Commission against crypto influencer Ian Balina - made the claim that the entirety of the Ethereum block falls under US jurisdiction. Calm your bits. The [legal hot takes]( making the rounds on Twitter made it sound like the end of the world, but establishing jurisdiction doesn’t mean the US government has carte blanche to involve itself in the cryptoverse. But the case does show that governmental agencies are now looking at how to address the effects of crypto in the real world, some of which have been rather sketchy. Despite what some decentralized finance (DeFi) proponents say, this could be good for the industry as a whole. 2️⃣ Yes, I'm only a bill [US House proposes a two-year ban on algorithmic stablecoins]( If you need a refresher on the chaos that algorithmic stablecoins can cause, read the story from South Korea in our More to Chew On section where authorities are confirming that, despite what Do Kwon says, he IS on the run. Keep in mind that in the US, a [bill becoming a law]( is a lengthy process. 3️⃣ Buying on the dip [Nasdaq to launch crypto services to lure in institutional money]( The world’s second largest stock market announced that it will offer custody services for Bitcoin and Ether to institutional investors. Nasdaq said despite the crypto winter, interest from institutional investors persists.  --------------------------------------------------------------- 🌙 TO THE MOON Tokens, NFTs, and yield generators we’re noticing [Okay Bears]( Okay Bears, a line of 10,000 well-dressed bears designed as [profile pic NFTs]( and launched on the Solana blockchain, is teaming up with [IMG]( to roll out a line of consumer products. The project earned US$18 million during its April launch. --------------------------------------------------------------- 🌏 BACK TO EARTH The week’s biggest roadblocks 1️⃣ [Ethereum falls 23% over the post-Merge weekend]( Anticipation was high after the Merge became official last week, but now that the party is over, the hangover has begun. There are a lot of reasons why, but the most obvious is that the Merge was never going to provide the instant gratification expected by some holders. Gas fees still exist and Ether staked in the Merge won’t be released until after the Shanghai upgrade, which could be another six months. In addition, real-world inflation and its remedies are still having their effects on the cryptoverse. Ethereum investors also need to be prepared for more bad news. When the Shanghai upgrade is complete, 13.6 million ether will be able to reenter the market. 2️⃣ [Wintermute data shows company was already in debt]( Wintermute, which was hit with a US$160 million hack on Tuesday, has over US$200 million in outstanding DeFi debt, according to research by CoinDesk and Nansen. The creditors include TrueFi, Maple Finance, and Clearpool.  --------------------------------------------------------------- STILL A PONZI SCHEME The dark underbelly of Web3 and crypto today “A perfect example of a lending platform destined to implode... loans to crypto miners where income generated depends on bitcoin price. Default? No problem.” — [Michael, Anonymous Twitter critic]( The tweet refers to crypto lending platform Maple, formerly known as Maple Finance, which set up a US$300 million credit fund for Bitcoin miners, [according to Bloomberg](. Mining firms have been struggling recently and funding has become scarce, the report noted. The loans being offered include repayment periods of 12 to 18 months with interest rates ranging between 15% and 20%. However, the ability of these firms to make money from mining is based on the value of Bitcoin, which has fallen by 55% over the past year. --------------------------------------------------------------- MORE TO CHEW ON 1️⃣ [Binance and FTX bid $50m for Voyager’s assets]( The two exchanges are the top bidders for insolvent crypto lender Voyager Digital, according to The Wall Street Journal. Neither offer has been accepted yet, according to the report. The bidding topped out close to US$50 million. The report also showed that Binance’s current bid is slightly higher than FTX’s. 2️⃣ [Do Kwon is on the run, SK police say]( Despite his claims to the contrary, Do Kwon, a central figure in the US$40 billion collapse of UST, is on the run, Korean authorities say. According to the Financial Times, the Seoul Southern District Prosecutors’ Office said on Monday that it asked Seoul’s foreign ministry to cancel Kwon’s South Korean passport as he was “obviously on the run and has no intention to appear before us for questioning.” 3️⃣ [Thailand bans crypto firms from offering staking and lending]( The country's Securities and Exchange Commission has barred crypto companies from offering these services as of Sept. 1. The decision to ban "depository services," which includes paying returns to depositors, was made to protect traders from the risks associated with crypto lenders, according to the press release. 4️⃣ [Binance awarded MVP license in Dubai]( Crypto exchange Binance has received the Minimal Viable Product license from the Virtual Assets Regulatory Authority in Dubai, according to Arabian Business. The company was previously awarded a provisional license in March.  --------------------------------------------------------------- That’s all for this issue - we hope you liked it. WAGMI! P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? Switch to a different frequency or get new content through our [preference center]( or [unsubscribe](. You can also break our hearts and remove yourself from all Tech in Asia emails over [here](  Copyright © 2022 Tech in Asia, All rights reserved. 63 Robinson Road, Singapore 068894