The Scenius Sync (Issue #37)

Coinbase to Launch its Own Layer 2, Scroll’s zk-EVM Layer 2 Goes Live, & Binance's Reportedly Dubious Stablecoin Collateral

Scenius: The intelligence and the intuition of a whole cultural scene. The communal form of the concept of genius.

Welcome to The Scenius Sync.

Our mission with this concise publication is twofold:

1. Share the essential stories driving the crypto industry and markets.

2. Highlight innovative applications and mainstream adoption of crypto and blockchain technology.

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Essential News 🗞

1. Binance Moved $1.8B in Stablecoin Collateral to Hedge Funds Last Year

   • Cryptocurrency exchange Binance moved $1.8 billion of collateral meant to back its customers' stablecoins to hedge funds last year, according to a Forbes article on Monday. According to the report, Binance transferred the collateral to hedge funds including Alameda and Cumberland/DRW and did so without informing its customers. Per blockchain data, holders of more than $1 billion of crypto for B-peg USDC tokens had no collateral for instruments that Binance said would be fully backed by the token they were pegged to. B-peg USDC are digital replicas of dollar-pegged stablecoin USDC. Binance has denied using client assets without consent. Its chief strategy officer, Patrick Hillman, told Forbes the movement of money among wallets was common practice and not a problem, however, this would seem to undermine Binance’s recent efforts to demonstrate solvency through proof-of-reserves exercises as having two sets of books means that the company is asking customers and regulators to trust its accounting while making it very difficult to independently verify the solvency it claims.

2. Self-hosted Wallet Ban Avoided in New Draft of EU’s Anti-money Laundering Bill

   • Self-hosted addresses, formerly known as “unhosted wallets” in the European Union's policies, are back in discussion as European Parliament staff look to clarify that lawmakers do not want an outright ban on non-custodial services.

3. Coinbase to Suspend Binance USD Stablecoin, Saying It Doesn’t Meet Listing Standards

   • Coinbase will suspend trading of Binance USD (BUSD) starting March 13th because the stablecoin doesn’t meet its listing standards, the U.S. cryptocurrency exchange announced in a tweet Monday. Although Coinbase indicated the suspension is based on its own internal monitoring and review processes, the action follows the SEC’s issuance of a Wells Notice to Paxos alleging that BUSD is an unregistered security and the NY Department of Financial Services ordering Paxos to halt the issuance of BUSD.

4. Sam Bankman-Fried Faces New Criminal Charges Including Conspiracy to Commit Bank Fraud

   • SBF is facing new criminal charges after a judge unsealed a new 12-count indictment against him on Thursday, months after the former crypto exchange head was first indicted on eight counts last year.  The new indictment charges Bankman-Fried with conspiracy to commit bank fraud and conspiracy to operate an unlicensed money transfer business. Bankman-Fried is also accused of committing wire fraud on FTX customers, securities fraud on FTX investors and conspiracy to make unlawful political contributions and defraud the Federal Election Commission, among other crimes. 

5. SEC Objects to Binance.US’ $1B Voyager Deal, Alleging Sale of Unregistered Securities

   • A $1.02 billion deal by Binance.US to purchase assets of defunct crypto lender Voyager Digital has been opposed by New York and federal finance regulators, who said in Feb. 22 filings that it could prove discriminatory and unlawful.

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Innovation & Adoption 💡📈

1. Coinbase Launches Layer 2 Blockchain “Base “

   • Crypto exchange Coinbase launched Base, a layer 2 network on top of Ethereum built using Optimism’s open source technology known as the OP Stack, with the goal of attracting millions of new crypto users in the coming years. Base is being designed to provide easy, secure access to Ethereum L1, other L2s, as well as other L1 ecosystems. Read Coinbase’s announcement here.

2. Alchemy Launches Dapp Builder for the Next Billion Web3 Developers

   • The blockchain developer says its new Create Web3 Dapp tool is intentionally open source and can spin up decentralized applications in 4 minutes.

3. Scroll’s zk-EVM Layer 2 Goes Live on Ethereum’s Goerli Testnet

   • Scroll released a testnet version of its Ethereum Layer 2 network on the Goerli testnet, moving the zk-EVM from a pre-alpha to an alpha testing phase. Zk-EVMs are Layer 2 networks built on Ethereum that use zero-knowledge proofs to achieve scalability. The EVM part refers to the Ethereum Virtual Machine (EVM), the bit that runs applications instead of simply processing them. By being EVM-compatible, these networks are able to support Ethereum applications while also running at scale.

4. Chaos Labs Raises $20M in Seed Funding to Automate On-Chain Risk Optimization

   • The provider of on-chain risk optimization for crypto protocols raised $20m from Galaxy, Uniswap, Coinbase, Hashkey, Opensea, and fintech giantsPayPal Ventures, Lightspeed, and Bessemer, among many more.

5. Playboy Expects to Launch MetaMansion Virtual World This Year

   • Playboy’s Web3 lead Liz Suman told Decrypt at NFT Paris last week that the virtual world is slated for launch this year, and that there will be ways to get in even for users who aren’t part of the magazine brand’s Rabbitar community.