Silicon Valley Tech News Roundup – February 19th

Bao Fan (CEO of China Renaissance) goes missing – 2/17

Bao Fan (the CEO of China Renaissance Holding) was reported missing. China Renaissance Holding is a top Chinese investment bank and private equity firm in Beijing, and its clients include big tech companies like Meituan and Didi. The company announced the news in a market update on Thursday.

In the filing with the Hong Kong stock exchange, the company stated it has been unable to reach Bao Fan. The filing states: “The board is not aware of any information that indicates that Mr. Bao’s unavailability is or might be related to the business and/or operations of the group.” Consequently, the company’s shares plunged almost 50% and, at the market close, were down 28%. The company did not specify how many days Bao is missing. According to Caixin (Chinese business newswire), the staff has been unable to reach Bao for two days.

Bao Fan is the latest prominent Chinese executives to go missing. At least half a dozen executives disappeared for periods of time after a run-in with the Communist Party. Some of those include Guo Guangchang (the founder of the Fosun group) and Jack Ma (the founder of Alibaba).

Binance moved $400 million from its U. S. partner firm to a company managed by Zhao – 2/16

Based on the report published by Reuters, Binance (the cryptocurrency exchange) had access to bank accounts belonging to its independent U. S. partner and transferred large sums to Merit Peak Ltd (a trading firm) managed by Changpeng Zhao (the CEO of Binance).

According to the banking records, the transfers started in late 2020. During the first three months of 2021, Binance.US transferred more than $400 million to Merit Peak Ltd. Reuters could not determine the reasons for the transfers or whether it involved any funds belonging to Binance.US customers.

Kimberly Soward (Binance.US spokesperson) stated to Reuters their reporting included “outdated information.” She also said: “Merit Peak is neither trading nor providing any kind of services on the Binance.US platform.” She further added: “only Binance.US employees have access” to the US company’s bank accounts.

According to the internal messages viewed by Reuters, the transfers caused concern to the Binance.US executives, namely Catherine Coley, the CEO of Binance.US at the time, who left the company later that year.

The transfers suggest Binance exchange (which is not licensed to operate in the United States) had control over Binance.US accounts. The company maintained the US subsidiary was an independent US partner. The Securities and Exchange Commission and the Department of Justice requested information from Binance and Binance.US as a part of the investigation to establish whether the company is in breach of financial rules.

Do Kwon (founder of Terraform Labs) charged with fraud – 2/17

In a statement released this week, Gary Gensler (the chairman of the Securities and Exchange Commission) announced the SEC is charging Do Kwon with fraud.

Do Kwon founded Terraform Labs, the South Korean cryptocurrency exchange, in 2018. The company created TerraUSD tokens and Terra Luna. Both collapsed in May last year and cost the customers close to $42 billion.

The SEC statement reads: “We allege that Terraform and Do Kwon failed to provide the public with full, fair, and truthful disclosure as required for a host of crypto asset securities, most notably for Luna and TerraUSD… We also allege that they committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors.”

Kwon and his company raised the money by selling investors “an interconnected suite of crypto asset securities.” Many transactions were unregistered. Likewise, according to the SEC, Terraform Labs mislead its customers about the the stability of TerraUSD and claimed the tokens would increase in value.

South Korean authorities issued an arrest warrant for Kwon in December last year. However, his whereabouts are unknown, while some believe he is in Serbia.

Susan Wojcicki (YouTube’s CEO) to step down – 2/18

In a blog post published this Thursday, Susan Wojcicki (the CEO of YouTube) announced she is stepping down from the position. Wojcicki took the job in 2014. Neal Mohan (chief product officer) will become the new head of YouTube and senior vice president.

Susan Wojcicki wrote: “Today, after nearly 25 years here, I’ve decided to step back from my role as the head of YouTube and start a new chapter focused on my family, health, and personal projects I’m passionate about… The time is right for me, and I feel able to do this because we have an incredible leadership team in place at YouTube.”

In agreement with Sundar Pichai (the Alphabet CEO), she will take on an advisory role across Alphabet and Google. Wojcicki said: “This will allow me to call on my different experiences over the years to offer counsel and guidance across Google and the portfolio of Alphabet companies.” Sergey Brin and Larry Page (the founders of Google) worked from Wojcicki’s garage when they founded Google. She joined Google in 1999 and worked on its advertising and analytics products. Likewise, she supported the 2006 $1.65 billion acquisition of YouTube.