SBF out in the cold as FTX inner circle folds

In Token Issue this week, we provide an update on the FTX fallout and look at the crypto survivors in Singapore’s fintech landscape. [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 Shihan Fang Crypto journalist Hi {NAME} Former FTX boss Sam Bankman-Fried (SBF) launched a [newsletter]( on Thursday and in it, categorically denies that he stole funds or stashed billions away. But suffice to say, trolls on Twitter still [aren’t convinced]( of his innocence and are working hard to tear him apart. A [recent profile on Puck]( provides some insight into his psyche. SBF is now holed up in his parents’ home in Palo Alto, protected by a German shepherd and two security guards working 24/7 to keep the fallen crypto king alive. It’s not paranoia - SBF recalled that there was one citizen vigilante who was stopped by his guards. It’s also an incredibly lonely and emotionally trying time for him as he awaits trial in October. If convicted for the eight criminal charges that he is facing, SBF could serve up to [115 years in prison](. “For a number of years, I was incredibly lucky and fortunate in terms of a lot of the relationships and support that I had,” he said to Puck. “Now there’s basically nothing left.” SBF hasn’t spoken to members of his inner circle since FTX blew up in mid-November 2022. For good reason - they’ve all been cooperating with the authorities to throw him under the bus, entering into various agreements to make the best out of the situation. The latest to fold is FTX’s former head of engineering, [Nishad Singh]( who has not been accused of any wrongdoing but is looking to cut a plea agreement in exchange for information on FTX’s and SBF’s political donations. He’ll likely need to provide further detail on the US$543 million worth of loans that he received from Alameda Research. Singh adds to the growing list of key SBF confidantes that have buckled. Former Alameda Research CEO Caroline Ellison and ex-FTX CTO Gary Wang pled guilty last year, while former FTX head of compliance [Daniel Friedberg]( is also expected to testify as a government witness in SBF’s October trial. Friedberg has not been charged or told that he is under criminal investigation. Brett Harrison, who previously served as CEO of FTX US, also [hinted on Sunday night]( that he may already be cooperating with the authorities. Meanwhile, shock waves continue to reverberate through the crypto industry. Crypto lender Genesis was forced to halt withdrawals in November 2022 and [has still not resumed services on its lending arm]( even though its spot and derivatives businesses continue to be operational. Genesis is currently the subject of a verbal battle between Cameron Winklevoss, the co-founder of crypto exchange Gemini, and Barry Silbert, the CEO of Digital Currency Group (DCG) - the parent company of Genesis as well as crypto media publication CoinDesk. Prior to the FTX collapse, Gemini partnered with Genesis for its “Gemini Earn” product, which offered investors annual interest returns of up to 8%. But with the Genesis lending arm in limbo, Gemini has [terminated the product]( and says it will return investors the assets that they staked. Winklevoss is now [calling for the DCG board to remove Silbert]( calling him “unfit to run DCG” by citing his inability to reach a fair resolution with Genesis’ creditors. As the crypto giants continue to slug it out, it’s clear that this winter is one that will test the mettle of companies in it for the long haul. [One executive from Ripple]( is predicting further industry consolidation this year as well as acquisitions of crypto firms by traditional finance companies. Which brings us to the big story this week. My colleague Melissa takes a look at Singapore’s thriving fintech landscape, which now includes 11 licensed crypto companies and another seven that have in-principle approval. She updates it periodically. Check the map again next year to see how many crypto companies are still around or, even better, whether they have multiplied. – Shihan  ---------------------------------------------------------------  THE BIG STORY  [The key players in Singapore’s thriving fintech space]( Funding to fintech startups in Singapore reached a peak of 85 deals last year, amounting to US$2.6 billion. It was also the year when digital banks burst into the scene in the city-state. Breaking from the mold, many of them were backed by corporate giants instead of VCs. For example, full digital bank GXS - the joint venture between Grab and Singtel - launched its services to a limited number of customers, but it’s Standard Chartered and Fairprice Group’s Trust Bank that stole the show, clocking in 400,000 customers as of December last year. Crypto is also increasingly becoming a core part of the city-state’s fintech landscape. The Monetary Authority of Singapore (MAS) has dished out [11 licenses]( to companies providing crypto services. Another seven companies have received in-principle approval, including the Singapore arm of Genesis. Crypto lender Hodlnaut, a casualty from the Terra collapse in May last year, has withdrawn its application for a license.  --------------------------------------------------------------- ⭐ TO THE STARS A look at what’s pushing Web3 forward [Hong Kong may allow retail investors for crypto in June]( Crypto is currently regulated by three agencies in the city. The Hong Kong Monetary Authority looks at stablecoins, the Securities and Futures Commission takes on enforcement responsibilities, while the Financial Services and the Treasury of Hong Kong (FSTB) develops policy direction for the financial sector. A CoinDesk interview with the secretary of FSTB, Christopher Hui, indicates that the city may allow for retail investors under the new regulatory framework, set to come into effect in June. Hui also provided assurance that Hong Kong’s regulatory and legal system is separate from Beijing’s as the pair operate under a “one country, two systems” agreement. Singapore, meanwhile, is looking to restrict crypto access for retail investors in the country. The Blockchain Association of Singapore (BAS) [published its feedback]( on an MAS consultation paper that called for industry views on proposed crypto regulations. The leading industry group for crypto cautioned that introducing consumer access measures could have a perverse impact of steering consumers toward unregulated crypto companies that operate outside of Singapore. BAS also disagreed with a proposed ban on crypto companies lending out retail customers’ tokens, arguing that earning interest is a key reason why retail investors purchase tokens in the first place.  --------------------------------------------------------------- 🌙 TO THE MOON Promising crypto projects we’re noticing. BitDAO launches testnet for Ethereum L2 blockchain Mantle [BitDAO]( a decentralized autonomous organization backed by crypto exchange Bybit, launched its blockchain project [Mantle]( in November 2022. An Ethereum Layer 2 blockchain, Mantle is [EVM]( and uses BitDAO’s Bit as its native token. Mantle launched its testnet on Tuesday, calling it “Wadsley” - named after mineralogist [Arthur David Wadsley](. Bit crashed 17% after the testnet announcement went out, but it recovered shortly and is now trading at roughly US$0.44. Relatedly, [Yeeha Games]( a Bybit [GameFi]( platform, released its first role-playing game on Thursday. Built on Polygon, Oath of Peak resembles the Chinese video game hit Genshin Impact but has NFTs integrated to its gameplay. [Liquid staking platforms surge ahead of Ethereum upgrade in March]( Liquid staking projects like [Lido Finance]( and [Rocket Pool]( are enjoying a rally ahead of Ethereum’s first post-merge upgrade, which has been named “Shanghai.” Speculators anticipate that more stakers will seize the Shanghai opportunity to unstake their ether from Ethereum and stake them via these platforms instead. There are two reasons for that. Firstly, liquidity staking platforms allow users to stake their ether and get derivative tokens in exchange. These derivative tokens can then be traded, providing the user with more liquidity for their asset than if they were to stake it directly on Ethereum. Secondly, users can also stake fractions of ether on liquidity platforms rather than the [minimum threshold of 32 ether]( reducing the barrier for staking. --------------------------------------------------------------- 🌏 BACK TO EARTH The week’s biggest roadblocks Crypto layoffs continue at Huobi, Coinbase, and ConsenSys Crypto exchange Huobi will lay off 20% of its staff amid rumors on social media that the company is forcing its workers to take their salaries in USDT, closed its internal communications system, and is preparing to enter labor arbitration with a 400-strong group of angry employees. A Huobi spokesperson tells Tech in Asia that the layoffs will be made as the firm continues to add 390,000 users monthly and amid plans to accelerate the pace of its global compliance rollout. Another crypto exchange, Coinbase, announced that it will [let go of about 950 staff]( as part of a cost-cutting initiative to reduce its operating expense by 25%. This is the third round of layoffs for the firm since last year. ConsenSys, the developer of popular crypto wallet MetaMask, has also said that it will [cut at least 100 employees](.  --------------------------------------------------------------- STILL A PONZI SCHEME yeah like, the only affected would be people into nfts lmao let them get hacked - [@DDSeudonym]( [ASEC analysts]( have discovered a fake Pokemon NFT game that delivers malware rather than profits. The website “pokemon-go[.]io” hosted a “Play on PC” button that, when clicked, triggered the download of an executable that appeared to be a game installer. Except that it installed a NetSupport remote access tool instead, giving hackers a way into the victim’s system. Thankfully, the website is now offline. --------------------------------------------------------------- MORE TO CHEW ON 1️⃣ [Beosin sums up top 10 Web3 hacks of 2022]( Web3 cybersecurity firm Beosin listed the US$624 million Ronin hack as the most expensive security incident last year in its Global Web3 Security Report 2022. The company studied more than 167 major attacks, which amounted to a total loss of US$3.6 billion last year, an increase of 47.4% compared to 2021. 2️⃣ [Binance admits to problems with its BUSD Peg]( A company spokesperson confirmed that the exchange undercollateralized its holdings for the BUSD minted on its Binance Smart Chain more than once. The spokesperson attributed the incidents to that of operational delays, rather than negligence, and that the pegging process has since been corrected. 3️⃣ [Fed not relaxing interest rates just yet]( Federal Reserve chairman Jerome Powell was expected to announce changes to the bank’s tightening policy this week, but he instead said that he was staying on course. The Fed embarked on its most aggressive rate hike campaign since the 1980s last year, raising rates by 4.25 percentage points to quell inflation. The bank is due to make a policy announcement by February 1. 4️⃣ [Tornado Cash alive but hamstrung after OFAC sanctions]( Decentralized crypto mixer Tornado Cash, allegedly used to launder crime proceeds, saw its inflows drop by 68% after the Office of Foreign Assets Control (OFAC) announced sanctions against it, according to Chainalysis. But its services remain online. This week, Tornado Cash [received 1,200 ether (roughly US$1.5 million)]( from a wallet related to the [US$190 million Nomad exploit]( suggesting that the attackers were attempting to cash in the funds. Currency converted from ether to US dollar: US$1=0.00071 ether.  --------------------------------------------------------------- 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 © 2023 Tech in Asia, All rights reserved. 63 Robinson Road, Singapore 068894