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Asic examines collapsed bitcoin company Blockchain Global after Guardian investigation

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Australia’s corporate regulator will examine details of the collapsed bitcoin company Blockchain Global after a Guardian Australia investigation revealed links between two of its directors and a series of failed crypto investment schemes.

Blockchain Global collapsed in 2021 owing creditors $58m, with the liquidator referring its directors – Allan Guo, Sam Lee and Ryan Xu – to the Australian Securities and Investment Commission for potential breaches of the Corporations Act. This included possible breaches of director’s duties, breaches of trust and unreasonable director-related transactions.

Asic initially advised liquidators Pitcher Partners that it did not intend to take action after it received the first report on the company’s activities in March 2022.

But after a Guardian Australia investigation into the HyperVerse crypto investment scheme, which has links to Lee and Xu, Asic has begun an examination of the liquidator’s report. A final version was filed to Asic in October.

An Asic spokesperson told Guardian Australia: “Asic confirms that it is assessing reports from the liquidator in relation to BGL.”

Guardian Australia has revealed widespread losses to the HyperVerse investment scheme, which escaped regulator attention in Australia despite being flagged by authorities overseas – by one as a possible “scam” and another as a “suspected pyramid scheme”.

Court documents filed in January in the US against Bitcoin Rodney, a senior US promoter of HyperFund and HyperVerse, allege the scheme operated with a network or promoters making “fraudulent promotional presentations” to investors and potential investors. He has been charged with operating and conspiring to operate an unlicensed money transmitting business.

An affidavit filed by the US internal revenue service alleges that early investors were “paid with funds collected from more recent investors”, and the company’s claimed revenue-generating bitcoin mining operations did not exist. There is no mention of Xu or Lee in the court documents filed by authorities in that case.

Lee has denied being behind HyperVerse, saying his involvement was limited to technology provision and the funds management side of the organisation. Both Lee and Xu appeared in the HyperVerse global launch event in 2021, alongside a fake chief executive officer called Stephen Reece Lewis. Xu and Lee also both featured prominently in promotional material for the schemes that preceded HyperVerse, known as HyperFund and HyperCapital.

Reece Lewis has since been revealed by the Guardian to be the British man Stephen Harrison, who said he was hired for a short period via a talent agent to play a “corporate presenter” and that he had no role in the actual business.

Lee relocated to Dubai in 2021, while the whereabouts of Xu is unknown. Guo is not involved in the Hyper group schemes.

The US-based crypto analysis firm Chainalysis estimates losses to HyperVerse in 2022 amounted to US$1.3bn (A$1.97bn).

The move by Asic to examine the Blockchain Global collapse comes as the liquidator also reveals a possible link in the company’s records to the operation of HCash, which was a cryptocurrency linked to the Hyper investment schemes.

“The liquidators have identified two debt transactions totalling $500,000 in Blockchain Global’s main bank account [linked to HCash]. These transactions both occur on 5 August 2019,” Pitcher Partner’s liquidator Andrew Yeo told Guardian Australia.

“It is not clear whether the funds were used for this intended purpose.”

Rewards that were accumulated through the earlier Hyper schemes were converted to HCash before they could be converted to other cryptocurrencies.

According to a “HyperTech group organisational chart”, HCash was one of three Australian companies behind the Hyper investment schemes, in alliance with Blockchain Global, Collinstar Capital and the HCash Foundation.

According to the HyperTech group’s promotional material, Collinstar Capital, Blockchain Global and HCash were a “multi billion dollar group of companies”.

The HCash official Telegram group confirmed its association with HyperTech and HyperCapital in 2019, saying it was “allied with the HyperTech group”.

Asic documents show that HCash Tech Pty Ltd was owned by Xu and Jianbo “Jacob” Cheng and was established in 2017. An application for it to be deregistered was made in May 2023.

Collinstar Capital was owned by Xu until mid 2022, after which it was taken over by Cheng.

Asic documents reveal shares of the company’s 40 founders were transferred from Xu to Cheng for $5.50, while 200,000 noncumulative preference shares were transferred at no cost, with a value of $125,000 listed as unpaid.

Cheng did not respond to questions from Guardian Australia.

Lee did not respond to questions from Guardian Australia before the publication of a previous article about his involvement in the establishment and operation of HyperFund and HyperVerse. He has previously denied the schemes are a scam.

In a WhatsApp message after the article was published he alleged it included “misstatements” about his role in running the Hyper schemes but did not respond when asked what they were. He also claimed that “people on the internet continues [sic] to make things up”.

Lee has also not responded to questions from Guardian Australia about the liquidators’ findings in relation to Blockchain Global.

 

Source: The Guardian

The post Asic examines collapsed bitcoin company Blockchain Global after Guardian investigation appeared first on HIPTHER Alerts.

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Supply Chain Finance Market Forecast to Reach $9.4 Billion by 2029: Increasing Emphasis on Sustainable Sourcing

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Global Supply Chain Finance Market

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Web3 Startups Raise Nearly $1.9B in Q1 2024 Despite Overall Downtrend in Crypto VC Interest

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Venture capital funding for cryptocurrency and blockchain projects has seen a notable resurgence in the first quarter of 2024, marking its first quarterly rise since 2021. Crunchbase data released today indicates that Web3 startups secured nearly $1.9 billion in funding across 346 deals during this period. This represents a substantial 58% increase from the previous quarter, offering a glimmer of hope amidst the ongoing downward trend in overall crypto VC interest.

The recent surge in funding can be attributed to investors adopting a more long-term perspective on Web3, as opposed to the hype-driven “tourist investors” predominant in recent years. Chris Metinko, the author of the report, notes that investors are shifting their focus to the AI sector, indicating a change in investment strategy. There is a growing interest in supporting the foundational infrastructure of the decentralized internet, rather than solely concentrating on crypto wallets and lending platforms, which attracted significant investments during the peak period of 2021 to 2022.

While large funding rounds were relatively uncommon in Q1, several notable investments stood out. Exohood Labs, a company integrating AI, quantum computing, and blockchain, secured a remarkable $112 million seed round at a valuation of $1.4 billion. EigenLabs, an Ether token “restaking” platform, raised $100 million in a Series B round led by a16z crypto. Additionally, Freechat, a decentralized social network leveraging blockchain technology, secured $80 million in a Series A round. These investments, among others, contributed to the increase in valuations and the emergence of four new Web3 unicorns in Q1.

Despite the recent progress, the future trajectory of Web3 remains uncertain. Metinko suggests that the next few quarters will be pivotal in determining the industry’s direction. While investors anticipate a rebound in investment as the decentralized internet evolves, it may take another year for venture capital activity to stabilize after the exuberance of 2021. Factors such as the approval of U.S. spot Bitcoin exchange-traded funds and the upcoming Bitcoin halving could also influence the market, given the rising prices of Bitcoin and Ether.

A noteworthy example of significant funding in the Web3 space is Monad Labs’ recent successful funding round, which secured $225 million led by Paradigm. Monad Labs is a layer-1 blockchain compatible with Ethereum, offering faster transaction processing. This funding round harkens back to the golden era of crypto funding in 2021-2022, when L1 solutions attracted substantial investments.

Earlier this year, Balance, a digital asset custodian based in Canada, announced that it had once again reached $2 billion in assets under custody (AUC) amidst the recent market recovery. Similarly, Korea Digital Asset (KODA), the largest institutional crypto custody service in South Korea, has experienced remarkable growth in crypto assets under its custody, expanding by nearly 248% in the second half of 2023.

Analysts at Bernstein Research project that crypto funds could reach an impressive $500 billion to $650 billion within the next five years, representing a significant leap from the current valuation of approximately $50 billion. This forecast underscores the growing optimism and potential for substantial growth within the crypto industry in the coming years.

Source: cryptonews.com

The post Web3 Startups Raise Nearly $1.9B in Q1 2024 Despite Overall Downtrend in Crypto VC Interest appeared first on HIPTHER Alerts.

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ASIC cracks down on blockchain mining firms

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Three blockchain mining companies – NGS Crypto, NGS Digital, and NGS Group – along with their directors, Brett Mendham, Ryan Brown, and Mark Ten Caten, are facing legal action from the Australian Securities and Investments Commission (ASIC) for allegedly operating without a license, in violation of Australia’s Corporations Act. ASIC initiated legal proceedings against these entities on April 9, citing concerns about their non-compliance with financial regulations and their solicitation of Australian investors.

According to ASIC, the NGS companies promoted blockchain mining packages with fixed-rate returns to Australian investors, encouraging the transfer of funds from regulated superannuation funds to self-managed superannuation funds (SMSFs) for conversion into cryptocurrency. Approximately 450 Australians invested a total of around USD 41 million in these packages, raising concerns about potential financial losses.

The legal action filed by ASIC alleges that the companies violated section 911A of the Corporations Act, which prohibits companies from providing financial services without a valid Australian Financial Services Licence (AFSL). ASIC is seeking interim and final court orders to prohibit the NGS companies from offering financial services in Australia without an AFSL.

ASIC Chair Joe Longo emphasized the importance of investors carefully considering the risks before investing in crypto-related products through their SMSFs. Longo stated that ASIC’s actions send a message to the crypto industry about the regulator’s commitment to ensuring compliance with regulations and protecting consumers.

In a separate development, the Federal Court appointed receivers for the digital currency assets associated with the NGS companies and their directors to safeguard these assets amid concerns about the risk of dissipation. Mendham was also issued a travel restriction order, preventing him from leaving Australia.

While a court date for the proceedings has not been set, ASIC’s investigation is ongoing, with the regulator continuing to gather evidence and build its case. It is worth noting that the investigated companies share a similar name with NGS Super, a legitimate Australian pensions provider, leading to potential confusion among investors. NGS Super clarified that it is not involved in selling cryptocurrency or related products and has taken legal action to protect its trademark and members’ interests.

Source: iclg.com

The post ASIC cracks down on blockchain mining firms appeared first on HIPTHER Alerts.

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