Set it and forget it prop strategies brought to you by Babel Finance

Good morning. Babel Finance lost $280 million trading customer funds, the final Ethereum testnet merge will occur in August, and Voyager gets told to stop misleading customers by US regulators. All that and more today! Happy Friday!

Market Update (as of 8:17am ET):

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Top 5:

1. Babel Finance lost over $280 million in proprietary trading with customer funds. The Asian crypto lender has apparently suffered heavy losses while executing proprietary trading strategies with customer funds. The losses amounted to around 8,000 BTC and 56,000 ETH (~$280 million) and led to the firm's trading desks being unable to meet margin calls. Trading accounts under the Proprietary Trading team were "not controlled or monitored by [the] Trading Department; no trading mandate or risk controls were implemented for these accounts; no PnL [profit and loss] was reported." The company, which has halted all customer withdrawals in an attempt to restructure, is looking to raise around $450 million in financing through convertible bonds and lines of credit. This plan would see creditors ultimately become shareholders in the firm, but it remains unclear if previous backers such as Sequoia Capital China, Dragonfly Capital, and Circle Ventures are willing or able to provide a fresh infusion of cash to the company.

2. Clearpool scales uncollateralized lending marketplace to Polygon. DeFi protocol Clearpool is launching on Polygon. The protocol acts as a decentralized marketplace for digital asset liquidity and provides institutional borrowers access to uncollateralized loans through a network of lenders. Institutions must first be whitelisted by Clearpool before being allowed access to borrow from the protocol. Lenders will then provide loans based on the creditworthiness of a borrower rather than the capital pledged as collateral. The decision to expand from Ethereum onto the Polygon network was driven by Polygon's ability to scale, transaction speeds, and lower gas fees.

3. Ethereum’s final testnet Merge set for early August. We are inching closer to the mainnet merge, with an announcement from the Ethereum Foundation that the final testnet (Goerli/Prater) deployment will be completed next week. The much anticipate and much hyped shift to the proof-of-stake consensus mechanism may be behind ETH's 44% price jump over the last month compared to BTC's 14.6% rise.

4. Crypto lender Voyager ordered by US regulators to stop misleading customers. Banking regulators have told the firm to stop making false claims that the company was insured by the US government. The Federal Reserve and FDIC issued a joint statement on Thursday saying

Voyager has made various representations online, including its website, mobile app, and social media accounts, stating or suggesting that: (1) Voyager itself is FDIC-insured; (2) customers who invested with the Voyager cryptocurrency platform would receive FDIC insurance coverage for all funds provided to, held by, on, or with Voyager; and (3) the FDIC would insure customers against the failure of Voyager itself

The two regulators have threatened further action if the misleading statements are no removed within ten days of their joint statement.

5. Excalibur - by Arthur Hayes. Some weekend reading from our friend Arthur Hayes. This time Mr. Hayes dives into the economic situation in the EU and when/how the Fed might step in to provide assistance.

Updates and other stories:
- Axie Infinity CEO moved $3M in tokens before $622M hack...Read More
- a16z leads $50M seed round for Gary Vaynerchuk’s NFT project...Read More
- Apple Seeking Web3-Savvy Content Marketing Directors...Read More

Top Sharers of the Crypto Top 5:
1. Donna Y. - Nashville, TN
2. Jake Y. - Greenville, SC
3. Forrest H. - Evansville, IN

External Resources:
1. Cryptopedia from Gemini - if you see a word, acronym, or phrase in this newsletter that you don't understand, there's a good chance you can find an explanation here
2. Crypto Explainer+ - intro level courses on Bitcoin, Ethereum, decentralized finance, NFTs, and more
3. Crypto Jobs! - looking for a new job? Check out this page from Anthony Pompliano with hundreds, if not thousands of listings

Disclaimer: The information contained in this newsletter shall not be understood or construed as financial advice. I am not an attorney, accountant, or financial advisor, nor am I holding myself out to be, and the information provided is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation.