Hillstone Finance Weekly Update (Jan 9~13)

Hillstone Finance
4 min readJan 13, 2023

Welcome to the weekly update from Hillstone Finance. We have brought two news for this week:
1. Duk-hyun Hong participated in the NBN news

NBN News (Jan 9, 2023)

Q. Binance is showing the movement of taking over Gopax.

A. Binance already failed to enter the domestic market previously. However, they have expressed their intention to re-enter by signing a business agreement with the Busan Metropolitan Government to establish a Busan Digital Asset Exchange.

Q. What would be the impact of Binance’s entry into Korea through Gopax?

A. As Binance takes over Gopax, they can help resolve the tied-up funds of GoFi, which is a good sign for domestic investors. Also, the possibility is given to Gopax’s listed coins to be listed on Binance. This will bring many positive effects to the domestic cryptocurrency market.

Q. Then, wouldn’t it be difficult for Binance to advance to Korea through Gopax?

A. The stake acquisition seems to have no problem. Nor does it seem likely to put Binance’s derivatives into Gopax. However, the key is whether the real-name account will continue to be maintained. Gopax has formed a real-name account partnership with Jeonbuk Bank to carry out the business currently. However, we’ll need to see whether the partnership will continue after being acquired by Binance.

Q. If Binance takes over Gopax, what strategy will it use to attract customers?

A. Because Gopax is the least effective exchange in domestic virtual asset markets, I don’t expect its influence to be grown for now. However, if Binance uses a strategy that limits the exchange’s provision of travel rules exclusively to Gopax, the exchange’s share is likely to increase.

Q. What do you think of Mt. Gox’s Bitcoin distribution issue?

A. The release of Mt. Gox’s reparations was postponed until March. Many people are shrinking in anxiety due to the volume, but investors need to make accurate judgments as inaccurate information is pouring out. Simply the compensation deadline was postponed to March, and no date has been set. Creditors who failed to enter the information at the time cannot receive compensation. We need to distinguish the facts.

NBN News (Jan 13, 2023)

Q. Can you explain Gemini exchange, Digital Currency Group, and Genesis Capital?

A. Digital Currency Group holds known blockchain media — Coin Desk, Grayscale — the biggest cryptocurrency management, and Genesis Capital. Prior to the FTX crisis, Gemini Exchange was working with Genesis to run an interest payment program called ‘Gemini Earn’.

Genesis, which was lending cryptocurrency, has stopped lending new coins and repaying interest due to the lack of liquidity. Because the FTX exchange bankrupt, they can’t obtain any money from FTX. This caused preventing the Gemini Earn users from withdrawing deposits. The users sued the Winklevoss brothers — who are the founders of Gemini Exchange — for frauding.

Currently, news has been heard that Genesis, which is tied its assets to FTX, is on the verge of bankruptcy because it has failed to repay $900 million in funds. If the crypto company goes bankrupt, it will inevitably have a negative impact on the market.

Q. Then it sounds like trouble between Gemini Exchange and Genesis. Why Gemini is fighting against Digital Currency Group?

A. Currently the Digital Currency Group loaned $1.68 billion from Genesis. In the aspect of Gemini Exchange, Digital Currency Group should redeem money to get Genesis to pay back people. But Digital Currency Group claims that they have made no overdue interest, and the maturity is till May 2023 so they have no responsibility. The conflict between the two positions is still ongoing.

Q. So what position should investors take?

A. If Genesis goes bankrupt, the Digital Currency Group will have to sell the volume that Grayscale is holding to raise money. There is also a need to be prepared for risk, as this can cause market prices to collapse.

Q. I heard that Huobi Korea will rebrand without Huobi Global, how will it affect the domestic crypto market?

A. Huobi Korea seems to be trying to make a new decision as bad news continues to be heard in Huobi Global recently. I’m trying to enter the domestic exchange under a name other than Huobi, but I’m positive that there are more domestic exchanges. If the number of exchanges operated in Korea increases and overseas expansion is achieved, it can have a positive impact on the domestic blockchain industry.

That is all for this weekly update.

Thank you.

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