😨 LIBRA: The First Head Rolls

Good Tuesday! In today’s edition:

• 🪓 LIBRA scandal claims first scalp

• 🛒 Binance isn’t for sale. Well, not just yet.

• 🤯 “Brain control”: A $1.3M nutjob outburst

• 📉 ETFs: Big promises — show us the money

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Meteora Co-Founder Resigns Amid LIBRA Scandal 

Ben Chow, co-founder of liquidity protocol Meteora, has stepped down after being implicated in an alleged scheme to extract millions of dollars from memecoin launches, indicating that the controversy surrounding the LIBRA token is far from over. 

DeFi Tuna founder Moty Povolotski said that Kelsier Ventures, the firm responsible for market-making LIBRA, had been involved in a structured scheme to extract funds on Meteora’s memecoin staking platform, M3M3.

Povolotski also alleged that Chow had facilitated a network of influencers who had profited significantly by extracting value from retail investors. The schemes reportedly date back to several previous memecoin launches, including those of MELANIA, MATES and ENRON.

By Povolotski’s estimate, more than $200 million was siphoned off by insiders who had prior knowledge of token mint addresses ahead of the launches, allowing them to pre-buy them and profit. 

Although Chow claimed he had “never received or managed any tokens on the side,” Meteora’s pseudonymous second co-founder, Meow, who also heads Jupiter DEX, later notified his X followers that Chow had “chosen to resign.”

“While I am 100% confident about Ben’s character,  as a project lead he has also shown a lack of judgement and care about some of the core aspects of the project (given its current size and reputation) over the past couple of months. And this is unfortunately unacceptable,” Meow said on X.

Shortly after LIBRA was promoted by Argentina’s president, Javier Milei, and roughly one hour after its launch, it was listed under a “verified” tag on Jupiter.

The exchange justified the move in a statement saying that LIBRA’s market cap at the time was already at $1.5 billion and that verification was carried out in the name of protecting users.  

Meow maintains that no one at Jupiter or Meteora engaged in any insider trading or financial wrongdoing, and that neither did anyone receive any tokens inappropriately. 

Jupiter plans to enlist law firm Fenwick & West — the same lawyers accused of complicity in the massive FTX fraud case — to investigate and publish an incident report on the issue

Binance Is Not for Sale, CZ Says

Binance founder and former CEO Changpeng “CZ” Zhao on Monday denied rumors that the world’s biggest crypto exchange is being sold.

“Some lowly self-perceived competitor in Asia fudding about Binance (CEX) for sale. 😂 As a shareholder, Binance is not for sale,” Zhao said on X. 

“Top investors have always been interested in Binance,” he added. “Over time, we may allow some investments in the single-digit percentage range.”

Zhao’s comments echo remarks made by his co-founder and life partner, He Yi, on X earlier in the day. Yi said Binance wasn’t ruling out strategic partners and was open to mergers and acquisitions with other trading platforms looking to be taken over.

Earlier this month, a federal judge put the U.S. Securities and Exchange Commission's civil lawsuit against Binance, in which the exchange stands accused of artificially inflating trading volumes, misusing customer funds, and misleading investors about its monitoring controls, on hold for 60 days at both parties’ request. 

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Ethereum User Burns $1.3M to Send ‘Brain Control’ Warnings

An Ethereum programmer posting under the name “Hu Lezhi” burned 600 ETH worth $1.3 million on Monday to send onchain messages warning of “brain control” machines — the latest in a series of messages Hu has sent outlining their paranoid conspiracy theory.

“The bosses of Kuande Investment, Feng Xin and Xu Yuzhi, have used brain-machine weapons to persecute all company employees and former employees,” the message reads. “Even they themselves are also under control.” 

Kuande Investment, otherwise known as Wizard Quant, is a full-service quantitative hedge fund in China, according to its website, which lists Xin and Yuzhi as its co-founder and CIO, respectively.

Hu also burned 70.63 ETH on Feb. 15 with a message warning of wild animals becoming “slaves” to digital machines, and on Feb. 10 burned 33.03 ETH with a similar warning.

Hu’s wallet also funded a WikiLeaks donation address with 711.52 ETH worth around $1.9 million. All the donations contained onchain messages warning of “brain-machine chips.” 

The price of ETH spiked just after 10 a.m. ET — around eight-and-a-half hours after Hu sent their latest rant — reaching $2,832 before retreating and spiking again around seven hours later, then dropping back into the $2,600s, where it has been for most of this month. 

Those price movements were, however, generally attributed to the controversy around Solana-based tokens following the crash of the LIBRA memecoin at the weekend rather than to Hu’s unhinged messages.

Will XRP, Solana, and Dogecoin ETFs Leave Investors Out in the Cold?

Crypto markets have long been defined by “alt-seasons”, during which tokens other than industry giants bitcoin and ether outperform the market as investors roll their gains into higher-beta assets. Previous alt-seasons occurred during the DeFi summer in 2020, the Covid rally in 2021, and even last year’s memecoin craze. 

Since the re-election of Donald Trump there has been another alt-season — this time in the form of tokens being packaged into spot exchange-traded funds. The assets include XRP, the native token of the eponymous $155 billion XRP Ledger blockchain, $9.3 billion HBAR (Hedera Hashgraph), $29 billion ADA (Cardano), $9.3 billion LTC (Litecoin), $39.2 billion DOGE (Dogecoin), $7.6 billion DOT (Polkadot), and $90.5 billion SOL (Solana).

But before you buy, consider these key facts about each of the potential ETFs.

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• 📉 Argentinian President Javier Milei on Monday downplayed his role in the LIBRA memecoin collapse, claiming he had just “spread the word” and saying that foreign investors suffered the most losses.

• 💸 Dave Portnoy, founder of sports and pop-culture blog Barstool Sports, mistakenly spent $170,000 on the wrong LIBRA token, briefly pumping its price 3,000%, but the illiquid asset quickly tanked, leaving him with a massive loss.

• 🚔 India’s financial crime agency seized $190 million of crypto and assets linked to BitConnect’s fraud scheme, but its fugitive founder, Satish Kumbhani, remains wanted by both India and the U.S.

• 🎁 Donald Trump’s official TRUMP memecoin is rewarding past buyers of his branded merchandise with $50 worth of tokens, extending his push to blend politics with crypto.

• 🏦 Standard Chartered, Animoca Brands, and telco HKT are forming a joint venture to issue a Hong Kong dollar-backed stablecoin, leveraging banking, Web3, and telecoms expertise as Hong Kong finalizes its stablecoin regulations.

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